If [Buffett] were truly sincere, perhaps he might simply try paying the taxes the Internal Revenue Service (IRS) says his company owes? According to Berkshire Hathaway’s own annual report — see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.
According to the report, “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.”
Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “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.”
Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.
Here’s something else to consider about Buffett. Anyone who knows about Buffett’s business strategy knows that he is a long-term “buy and hold” investor. Each year, Berkshire Hathaway looks at dozens of successful companies in search of potential acquisitions. Buffett and his hand-picked team of business analysts then narrows the list down to a handful of select companies, and if a deal is reached those companies become part of the Berkshire Hathaway business group. Buffett became a legend because his acquisitions almost never fail to make money, and it is practically unheard-of for Buffett to divest himself of assets. So in addition to the fact that Buffett pays little or no personal income tax on Berkshire Hathaway’s earnings because Berkshire Hathaway pays no dividends to its share holders, Warren Buffett’s personal annual capital gains liability is also minimal because he never sells. When Buffett suggests that capital gains should be treated as ordinary income, his opinion really doesn’t matter because he would essentially have zero additional tax liability if such a change was ever made to the tax code.
And that’s pretty much the general rule – whenever millionaires and billionaires propose tax “reforms” you can be damn well sure they have taken measures to insulate themselves from most of the additional liability that might occur as a result of those reforms. And you can also be damn well sure that ordinary wage earners, working professionals, or small business owners still won’t have any kind of access to the loopholes used by the very rich.
The truth about Warren Buffett is that he is a brilliant businessman who built a multi-billion dollar investment firm around a business model that allowed him to accumulate a tremendous amount of personal wealth, with only a stunningly small exposure to income tax liability. That doesn’t make him a bad person, it just makes him a hypocrite for suggesting that he and his fellow billionaires are undertaxed.
And while you’re at it, check out STFUandPay.com, which has a link to the US TreasuryDirect gift contributions page, where you or anyone else can send a check that will be applied directly to offset the National Debt. The Treasury has only raised a paltry $2 million so far this year. C’mon Warren, you earned over a hundred times that much in just one day, after your purchase of Bank of America stock hit the news wires.