At the 2024 Berkshire Hathaway Annual Meeting, billionaire investor Warren Buffett made headlines with a bold claim about corporate taxes. Noting Berkshire Hathaway’s significant federal tax contributions, Buffett suggested that if 800 other companies matched Berkshire’s federal tax payments, “no other person in the United States would have had to pay a dime of federal taxes-no income taxes, no social security taxes, no estate taxes.”
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Buffett explained that in 2023, Berkshire sent over $5 billion in federal taxes to the U.S. government. He emphasized that his company and its shareholders feel a responsibility to contribute to the country’s economy, particularly because the U.S. system has provided many opportunities and advantages.
“We always hope at Berkshire to pay substantial federal income taxes,” Buffett said, adding that he feels it’s appropriate for the company to contribute this way.
Buffett also discussed the broader implications of tax rates and government spending. Currently, Berkshire pays a 21% federal tax rate on its earnings from investments like Apple stock. At one point, the corporate tax rate was 52%.
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According to Buffett, the federal government essentially owns a percentage of Berkshire’s earnings and can change its share whenever needed. Buffett speculated that the taxes could increase again soon, particularly as the growing fiscal deficit continues.
The U.S. national debt has reached substantial levels and Buffett acknowledged at the meeting that higher taxes from companies like Berkshire Hathaway could help offset this challenge. “They may decide that someday they don’t want the fiscal deficit to be this large because that has some important consequences,” he noted.
While Buffett’s statement about 800 companies potentially covering all federal taxes for Americans was striking, this figure reflects the reality of Berkshire’s tax contributions compared to other companies. Buffett highlighted the impact large corporations could have on the tax base and expressed his long-standing belief in the importance of businesses fulfilling their tax responsibilities.
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While Buffett seems to support increased corporate taxes, not everyone agrees that this is the wisest move for the U.S. A video from the Tax Foundation suggests that raising corporate taxes may intend to fund helpful government services, but it could actually harm the people those services aim to help. The video claims that increased corporate taxes could reduce wages for younger workers, low-skilled workers and women. The Tax Foundation also states that many economists agree that corporate income tax is “one of the most harmful and least efficient ways to fund our priorities.”
As opinions diverge on the broader impacts of increasing corporate tax rates, Buffett remains resolute in his belief that companies like Berkshire should support the nation’s economy. He views taxes not as a burden but as a fair price for the opportunities America has afforded.
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