Warren Buffett squared off against other witnesses today at a Senate Finance Committee hearing on the estate tax.
Buffett, chairman of Berkshire Hathaway Inc., Omaha, Neb., the parent of a conglomerate that owns General Re Corp., Stamford, Conn., and is a major investor in Symetra Financial Corp., Bellevue, Wash., said Congress should preserve the estate tax to avoid a "dynasty of wealth" that could turn the United States into a plutocracy.
"I believe in keeping equality of opportunity," Buffett said.
Buffett accused opponents who refer to the estate tax as a "death tax" of intellectual dishonesty.
Only about 0.5% of Americans pay any estate taxes, Buffett said.
"You would have to be at 200 funerals to attend one where the decedent paid the tax," Buffett said.
Estate tax critics rarely talk about how the government would replace the $24 billion in revenue it now gets from the tax, Buffett added.
Estate tax critics "just say 'free us,'" Buffett said. "They don't say who to further shackle."
Dean Rhoads, a rancher and state senator from Nevada, testified that he and his wife had moved to land purchased by his in-laws and added to a ranch the in-laws owned. When Rhoads' mother-in-law died, the family had to sell that land, which had also served to produce hay for the family's cattle, to pay the estate taxes, Rhoads said.
"When my father-in-law died in 1995, there was no more land left to sell if we wanted to survive in the ranching business," Rhoads said. "Based on the ranch's value, the tax we now owed, with interest added, was over $340,000. Therefore we have been paying $18,000 in estate taxes, plus interest every year, which we are continuing to pay. We have had to borrow money to make these payments."
In some cases, estate taxes must be paid within 9 months, according to Eugene Sukup, chairman of Sukup Manufacturing Company, Sheffield, Iowa,
