Warren Buffett refuses to pay taxes he wants others to pay

 

 

by Jack Minor –

 

Warren Buffett, who has been an outspoken supporter of Obama’s call for higher taxes on the wealthy, apparently does not practice what he preaches. The billionaire is currently fighting the IRS over tax payments.

 

In a Wall Street Journal editorial titled “Stop coddling the super-rich” Buffett called for raising taxes on what he called the “super-rich.”Buffett’s definition of super-rich is people making $1 million or more. According to Buffett, most rich people support being allowed to pay more in taxes. “Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.”

 

In the column, Buffett infers he would like to see capital gains treated the same as ordinary income for tax purposes. He laments his tax bill last year saying, “Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office.”

 

Critics of Buffett have pointed out there is nothing stopping him from refusing to take the tax breaks and sending as much money to the government as he wishes.

 

Ironically, while on the one hand Buffett is begging officials to raise his taxes, he is fighting the same government over amounts they say he owes.

 

Buffett is chairman and chief executive of the giant financial firm, Berkshire Hathaway. According to a company report, they have been involved in a tax dispute with the IRS for years.

 

The report says, on page 56, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Richard McCarty, a researcher for Americans for Limited Government, said the company appears to have had a practice of short-changing the government for years. “The company has been short-changing the tax collection agency for much of the past decade.   Mr. Buffett’s company has not fully settled its tax bills from 2002-2009.  Yet he says he’d happily pay more.  Except the IRS has apparently been asking him to pay more going on nine years.”

When one considers the size of the company, the amount of taxes due could be in the tens of millions.

 

 

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11 Responses to Warren Buffett refuses to pay taxes he wants others to pay

  1. al says:

    I am really surprised, people do not see the point of Mr. Buffet “Tax me more” issue. Obviously, it is part of the under the table deal between Buffet and Obama, where Mr. Buffet acts as Obama’s clown ( and get the carrot in the form of reduced taxes). I am sure, ALL Mr. Buffet company tax bills, which are currently pending from 2002-2009 will be either drastically reduced or magically disappear. Just his watch company reports in the years to come.

  2. David in Austin says:

    Mr. Buffett’s duplicity runs deep. According to his own admission, he paid almost $7 million in federal taxes last year, and laments that it was only 17.4% of his taxable income. Simple math shows that Mr. Buffett’s taxable income was just shy of $40 million. According to Forbes Magazine, Mr. Buffett is the second richest American with a net worth of over $50 billion. And as a result of his tremendous wealth, Mr. Buffett is lauded as one of the great financial minds of our time. And yet, for as wealthy as Mr. Buffett is, and for his very public desire to pay more in taxes, his taxable income last year was only 0.08% of his net worth. To put this into more understandable terms, let’s say that you had invested $100 during last year. This equates to a return of only 8 cents. Come on Mr. Buffett! Surely your real income was much, much higher. One only wonders what tax tricks Mr. Buffett and his undoubtedly large army of tax accountants utilized to lower his taxable income to such a paltry amount, given his huge net worth. Perhaps it’s in this math that the real answer to Mr. Buffet’s motivation lies. Perhaps it’s Mr. Buffett’s pandering to the current Administration that ensures that his overall tax rate versus his real income is kept so low.

  3. John says:

    I can’t believe how much this gets churned over.

    Directors of public companies have a fiduciary duty to maximise the profits of a business. From time to time this may mean challenging the amount that the company pays in tax.

    If any public company did not mount all responsible challenges, then it would be sued by shareholders — and rightly so.

    Buffett is suggesting that the law be changed so that the extreme wealthy pay a slightly higher tax rate as was done previously. But within the law, he and all other directors of public companies will take appropriate steps to mimimize tax.

  4. Jethro says:

    Attn goofballs, and know-nothings- this is NOT “warren buffet’s” tax bill. It’s Berkshire Hathaway’s. Buffet DOES NOT own Berkshire. He only owns shares. If he paid a tax bill that was not due (or allowed ANY improper bill to be paid), he would be defrauding ALL of his shareholders, and could be held responsible for FRAUD.

    If you don’t have the first clue about what you’re talking, do yourself a favor and keep quiet.

    People who continue to say things like this should be sued for slander and libel.

  5. Ed Rodguez says:

    Instead of Buffett having his taxes increased what he needs to do is hire more employees in his companies. The taxes these employees pay will help the economy and decrease unemployment. Sure it will be less than a drop in a bucket, but better than paying more in taxes.

  6. Bosco says:

    I agree with Jethro. If you don’t know what you’re talking about, be quiet. Like David in austin’s wonderful comment. You don’t pay tax on your “Net” worth.

  7. not Al or David says:

    Obviously Al and David haven’t a clue about taxes or finance. Net worth versus taxable income ? Under the table deals ? Huh ? And the author of this article is just as clueless. The article starts by bringing up Warren Buffet’s personal opinion and tax situation. Then it somehow morphs into the tax situation of a company he runs. I guess good writers are hard to come by on this site. At least John and Jethro have a clue. Perhaps they can apply ?

  8. Del says:

    The super rich should be taxed on their net worth!

  9. Bob says:

    Del is super rich.

  10. Nick says:

    Check out the “super smart” people .. He doesn’t own Berkshire, he just owns shares .. ?? Hey geniuses, he’s the CEO and is leading the charge to NOT pay Berk’s taxes. He’s more than a simple shareholder.

  11. David in Austin says:

    I think that Jethro and Bosco misunderstood what I was trying to say. I’m not advocating that the wealthy, or anyone else for that matter, pay taxes on their wealth, and I certainly understand the difference between earning and savings. What I was trying to point out is that there are really two tax rates that are important; your effective rate, which is the rate of taxes you pay on your adjusted gross income, and your “real” tax rate that is the rate you pay on what you really earned during the year. Using Buffet’s own words, he pays a 17.4% rate on his income. I was using some math, based on his overall wealth, to show that his real income must certainly be much higher than the computed $40 million. In other words, Mr. Buffet shields a vast majority of in income so that he is only left paying taxes on $40 million. Rather than worrying about a few paltry percentage points in increased tax rate on capital gains, maybe in Mr. Buffet’s case we should be asking how he is able to shield so much of his income from any taxes. Not that I’m implying that he’s breaking any laws. But using a 5% return on his wealth (which is principally investments), and his 17.4% tax rate, his taxes would have been about 63 times higher than what he actually paid, or about $430m higher. How nice it would have been for the U.S. treasury if he had paid that other $430m.

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