Berkshire buyback seen clashing with estate tax push

Warren Buffett

He has also been publicly campaigning for more than a year for higher taxes on the wealthy, even lending his name to a proposal called the "Buffett Rule" that failed in Congress.

DEATH AND TAXES

Berkshire also said Wednesday it raised the threshold for future share buybacks to 120 percent of book value from 110 percent, the level it chose when it first approved a repurchase program in September 2011. The higher level allowed Berkshire to complete this latest buyback, which was above the old threshold.

After news of the buyback, Berkshire's shares were up 3.1 percent at $134,850.

Based on the company's book value at the end of the third quarter, the buyback limit would stand for now at $134,061.60. The stock has traded below that level for most of this quarter.

Buffett was always loath to offer share buybacks and consented to it last year only after Berkshire hit historically low valuations. In its most recent quarterly filing, Berkshire said it had not made any repurchases in the first nine months of 2012, after spending just $67.5 million on buybacks in 2011.

"I don't expect a significant repurchase program to be announced as (Buffett) is clear that he is in acquisition mode," said Michael Yoshikami, founder and CEO of Destination Wealth Management and a long-time Berkshire investor.

Berkshire ended the third quarter with $47.78 billion in cash, and Buffett has made no secret of his desire for a purchase in the $20 billion to $30 billion range.

Yet given his wealth and his own self-professed low tax rate, Buffett has been called out in some quarters for not practicing what he preaches.

"I have a problem with Warren, who's basically done with this (issue), to say 'yeah, raise the estate tax,'" Sabino said.

"I think, again, with all due respect for his sagacity at selling stocks, he's being incredibly short-sighted."

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