Summary
Warren Buffett gave $1.1 billion in Berkshire Hathaway stock to family foundations and detailed plans for distributing his $147 billion fortune after his death.
His three children will oversee giving the remainder within 10 years, with designated successors in case they predecease him.
Buffett, 94, reaffirmed his belief in avoiding dynastic wealth, favoring philanthropy instead.
Over the years, he has donated $55 billion to the Gates Foundation but plans to shift focus to his family’s foundations.
Buffett continues leading Berkshire Hathaway while preparing Greg Abel as his successor.
The government is elected, oligarchs are not. Governments certainly can waste a lot of money, but they can be frugal too. For instance, expense ratios for Medicare are just a small fraction of private health insurance. Meanwhile, Bill Gates spent a fortune bending the American educational standards to confirm with his political philosophy and, by his own auditor’s conclusions it raised costs for everyone while degrading educational outcomes.
Without embracing the idea that billionaires are somehow just better at everything than most citizens, there is no reason to think they should have seriously outsized influence on public policy. Anyone paying attention today would be insane to conclude that our system is any kind of meritocracy.
If billionaires want to spend their money on charitable causes, I think that is great. The problem comes in when they use foundations to hide their money from taxes, starve the government of revenue, then backfill the deficiencies with systems designed to drive even more money to the top. Charitable contributions beyond what most people can make should not be tax deductable. Billionaires should pay what they owe, then can choose to be charitable with the rest.
If you think these massive foundations are earning 4% interest, you are out of your mind. The S&P500 index averages well over 10%. Private equity does even better than that.
Ok, then change it to 10% and do the same math. If it goes up 10%, loses 3% to inflation, and they’re required to spend 5%, that leaves a 2% return. Next year they’ll have 2% more money, so 5% of that is even more… etc.
I was just saying Adam in the video makes it sound like 5% is bad?, without saying why it should be higher.
RMDs for some personal retirement accounts are in the same ballpark of 5%. Should people in retirement be required to withdraw more?
The Nasdaq has been above 16% but, again, that’s nothing compared to what private equity can earn - especially when paired with political connections. Earning 2% after inflation and expenditures means the principal must never be touched, but that’s not the real problem. The problem is that the tax deductions happen immediately while spending the money back into the economy is postponed indefinitely.
For some accounts yes, but as people age that percentage goes up based on life expectancy and can go much higher than 5%.
Charity is great and should be encouraged, but effectively taking money out of the treasury to fund private charity gives the ultra wealthy an extreme level of undue influence over the rest of us. You and I don’t get to decide exactly how our personal taxes are used, and neither should a billionaire. How that money is spent is a collective decision through our government representatives, and nobody should have massively outsized influence. I would go further and say that any wealth over $10m should start running into an exponentially curved wealth tax that makes accumulation beyond $100m near impossible. (Obviously those marks are arbitrary, but I think that’s a good range for today’s dollar.) Wealth hordes of over $100m are really only useful for controlling society in order to collect even more money, whether it’s spent on buying politicians, controlling markets, or disseminating propaganda.