“It’s time for our government to get serious about shared sacrifice.”
– Warren Buffett, NY Times Op-Ed August 15, 2011
Those high-minded and selfless words from one of the nation’s richest men inspired the Democrats’ latest push for higher taxes on job creators. It also sounds like one of the creepy slogans chanted and repeated by the aromatic “Occupy Wall St” protesters when they decry corporate greed and the doomed capitalist system.
Yes, Mr. Buffett has entered his ninth decade of this mortal coil as somewhat of a folk hero to progressives and leftists who would normally be revolted by a multimillionaire investor. But Buffett (whose many holdings include the GEICO insurance company) has purchased a little media insurance by speaking out against his own tax rates and has practically begged the government to take more of his money and money from the rest of us who are business owners and are trying to be next decade’s Warren Buffett.
Meanwhile, according to research done by Americans for Limited Government, Buffett’s company, Berkshire Hathaway, has a decade-old dispute with the IRS over its corporate tax bill, an obligation worth $1 billion dollars, so far.
“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.”
If Buffett’s 15% capital gains tax rate were raised to the 35% income tax rate for his tax bracket, it would certainly bring in a little bit more money for the federal government, but it wouldn’t raise $1 billion more dollars in revenue.
The details of the tax obligation center around the corporate taxes filed by Berkshire Hathaway for the years 2002-2004. The IRS caught Buffett’s company shortchanging the American government. Buffett, the poster boy for “shared sacrifice”, responded by releasing his lawyers on the IRS and threatening protracted litigation. The company is working on a settlement with the IRS.
At the same time, the IRS has opened up another investigation focusing on the 2005-2006 tax filings and again, Buffett’s company is threatening a long and costly fight. The top corporate tax rate is 35% and according to Forbes Magazine, the effective rate for Berkshire Hathaway hovers around the 29% range.
As Mr. Buffett is trotted out in front of the “super-committee” in Washington to speak in virtuous tones about how we must all pay our “fair share”, I hope one of the congressmen or senators reminds him that he still owes a bit of money for that microphone he’s using to gain more legacy enhancers and glowing paragraphs in his NY Times obit.