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.
