Wednesday, December 08, 2010

Life insurance industry and the estate tax

JLM felt I was being too hard on Warren Buffett for his profiteering from the estate tax.  I was not as hard on him as these folks are.  A sample:
Estate taxes must be paid to the U.S. Treasury within a year of the testator's death. In cash.
Back in 1931, the liberal son of an immigrant banker knew what to call this kind of business. Matthew Josephson wrote The Robber Barons to argue that the industrial giants of the 19th century had not created wealth in the right way. They had acted like the feudal barons who for centuries had dominated the mountain passes through the Alps. The great corporations of the Gilded Age "monopolized strategic valley roads or mountain passes through which commerce flowed" just like the old barons-of-the-crags. 

Hello, Warren? Isn't your business model exactly the one that so offended young Matthew back in the Great Depression after he got back from a decade living la vie bohème as an ex-pat in Paris? Aren't your businesses sitting at an economic choke-point, exploiting the unintended consequences of bad government economic policy, gouging successful family businesses both coming and going, and exploiting grieving widows?
Read the whole thing, as someone once said.

1 comment:

JLM said...

Yup, business owners pressured to sell by the estate tax helped make Warren richer. But he preferred for them to continue running their businesses. By staying on they must have made themselves much richer, too. A win-win?