Warren Buffett’s brand of patriotism is to pay more taxes
How to fix all of America’s fiscal problems, and Trump’s tax cuts were awful
At Berkshire Hathaway AGM 2024, Warren Buffett was asked about the recent sale of Apple stock. He gave an insightful answer filled with wisdom on a number of topics, and once again reiterated one of the most powerful lessons he has shared in his lifetime:
And one thing that may surprise you but almost everyone I know pays a lot more attention to not paying taxes than I think they should. We don’t mind paying taxes at Berkshire, and we are paying a 21% federal rate on the gains we’re taking in Apple. And that rate was 35% not that long ago, and it’s been 52% in the past when I’ve been operating. And the federal government owns a part of the earnings of the businesses we make. They don’t own the assets, but they own a percentage of the earnings, and they can change that percentage any year. And the percentage that they’ve decreed currently is 21%. And I would say, with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely, … and we’ll pay it.*
We always hope, at Berkshire, to pay substantial federal income taxes. We think it’s appropriate that a country that’s been as generous to our owners… If we write another check like we did last year, we sent in over $5 billion to the US federal government, and if 800 other companies had done the same thing, no other person in the United States would have had to pay a dime of federal taxes. I hope things develop well enough with Berkshire that we say we’re in the 800 club and maybe even move up a few notches. It doesn’t bother me in the least to write that check. And I would really hope, with all America has done for all of you, it shouldn’t bother you that we do it.
(* As a reminder, the Trump era tax cuts failed to lead to the economic gains the leaders claimed they would, but rather hurt the economy over time by significantly harming the government’s revenue without decreasing spending, and they gave a much greater tax benefit to the rich than to the middle class or lower, especially because the tax cuts for normal people were set to expire after some years, but the corporate tax rate reduction was made permanent. Multiple analyses have pointed to the Trump tax cuts as a significant cause of the inflation seen between 2019 and 2023. Here is a bipartisan, fair explainer on the subject.)
Remember what another billionaire, tech entrepreneur, and investor, Mark Cuban said, “After military service, paying your taxes is the most patriotic thing we can do.”
These people, of course, are speaking from the point of view of the ultra rich. In the stratosphere of the billionaires, extra taxes do not affect their way of life but they do affect the course of the nation and the lives of many people with far less money. A progressive tax system, that relieves the burden on the middle and lower class but increases taxes on the ultra-wealthy, is critical to our nation being successful.
A fairly large group of the Republican politicians who market tax cuts and bemoan the deficit are not representing the People and are not even referring to middle-class taxes when they sell it to middle-class voters — they are representing parts of the super wealthy class who don’t have their greed in check the way Warren Buffett and Mark Cuban do. They are representing those super wealthy people because they are the ones who pay for those politicians to keep winning elections.
On the other hand, you can bet that most candidates who say we should raise taxes are thinking about the middle-class moms, dads, kids, and students, with the billionaires down at a lower priority.
I hope it’s clear for voters reading what you should do in November 2024!
