Samclem's comments struck a thought with me, so I'll split this off from the much-abused teacher-pay thread.
I'm fundamentally conflicted on estate tax. Generally I don't like taxes but I have a real warm & fuzzy feeling for this one.
First, I'm not sure that our kid needs to be burdened with our assets, let alone our estate tax. I much prefer the "compound it until you don't need it anymore, then start your charitable giving after you die" approach. Hopefully by the time she could inherit from our combined estate she'd be in her 80s anyway. So estate tax is not personally affecting our situation, especially (as FD points out) as long as the bypass trusts can shield the assets.
Second, much of Buffett's business-buying success has been due to estate tax. Look at a family-owned company like Justin Boots or Clayton Homes. Their owners are having a wonderful time building a business, and to them the gazillions of dollars of profit is an incidental side effect of their prowess. But if they die in the midst of their avocation then the estate tax is going to be a heavy burden on their heirs-- one that might even force them to sell off control in order to raise the cash.
Enter Buffett, a guy who pours millions of dollars into the former owner's pockets while letting them keep doing their thing. It's the perfect solution for any business owner (let alone Buffett) and they wouldn't be interested in selling out if it wasn't for the specter of paying such a heavy tax for dying on the job.
Same thing for Tweedy, Browne selling off their investment firm to a holding company. They're still running the show for their new managers, and doing what they'll probably want to continue doing until they die at their desks, but now their estate-tax problems are solved.
So if estate taxes make business owners seek guys like Buffett then I'm all for the tax. I've probably made more money off the estate tax than I'll ever pay!
I'm fundamentally conflicted on estate tax. Generally I don't like taxes but I have a real warm & fuzzy feeling for this one.
First, I'm not sure that our kid needs to be burdened with our assets, let alone our estate tax. I much prefer the "compound it until you don't need it anymore, then start your charitable giving after you die" approach. Hopefully by the time she could inherit from our combined estate she'd be in her 80s anyway. So estate tax is not personally affecting our situation, especially (as FD points out) as long as the bypass trusts can shield the assets.
Second, much of Buffett's business-buying success has been due to estate tax. Look at a family-owned company like Justin Boots or Clayton Homes. Their owners are having a wonderful time building a business, and to them the gazillions of dollars of profit is an incidental side effect of their prowess. But if they die in the midst of their avocation then the estate tax is going to be a heavy burden on their heirs-- one that might even force them to sell off control in order to raise the cash.
Enter Buffett, a guy who pours millions of dollars into the former owner's pockets while letting them keep doing their thing. It's the perfect solution for any business owner (let alone Buffett) and they wouldn't be interested in selling out if it wasn't for the specter of paying such a heavy tax for dying on the job.
Same thing for Tweedy, Browne selling off their investment firm to a holding company. They're still running the show for their new managers, and doing what they'll probably want to continue doing until they die at their desks, but now their estate-tax problems are solved.
So if estate taxes make business owners seek guys like Buffett then I'm all for the tax. I've probably made more money off the estate tax than I'll ever pay!