Warren Buffett and the Death Tax

Buffett likes the "death tax."

Ever wonder why?

Well, Tim Carney lays out a couple of good possibilities in his book The Big Ripoff.

First off, Buffett's empire includes Safeco Insurance--which just happens to sell insurance packages which facilitate estate-planning. That means that if you own Company X which is worth $75 million, you can purchase an insurance policy which will pay your chilluns enough to pay the Federal Estate Tax.

Buffett will be happy to sell you that policy, at a profit, of course.

But the REAL money is here.

Imagine again that you have that Company and it's worth $75 million--but this time you did NOT buy Buffett's insurance policy. You assume room temperature, and the chilluns now have the business.

They have to come up with about $37 million or so, and fast. And they can't. The business' cash-flow won't support a loan of that size.

They are in a pickle, and decide to sell the business.

They are called "motivated sellers."

Nothing is more....ahhhhh....interesting....for a fellow who buys low and sells high than "motivated sellers."

And Guess Who buys and sells businesses??

How do you suppose he acquired the Buffalo News and Dairy Queen?