... And Buffett's Buncombe

At the same Senate hearing where Senator Grassley made a strong case for repealing the death tax, one of the richest men in America, Berkshire Hathaway chief executive Warren Buffett, made a plea for keeping it in place. "A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy," according to Reuters. The Wall Street Journal reported Mr. Buffett proposed an estate tax exemption of about $4 million, indexed for inflation, and a tax rate of more than 45%. CNNMoney.com reported that Mr. Buffett said that the government should "take more out of the hides of people like me."

We've got lots of respect for Mr. Buffett's skill at allocating capital and for his performance on behalf of his shareholders. But he has his own motives here. He makes his money, in part, by buying family businesses that owners need to sell for estate-tax planning purposes. If he wants to give more out of his hide to the government nothing is stopping him from writing a big check to the U.S. Treasury. In fact, though, he has decided to give the bulk of his fortune to the Bill and Melinda Gates Foundation, judging that they are better at using money to help the poor than the federal government is. He's given other funds to foundations controlled by his children, foundations from which Peter and Jennifer Buffett have drawn salaries. As we've written before, on the estate tax, watch what Warren Buffett does, not what he says.