Warren Buffett, the billionaire investor and perhaps the biggest (and wealthiest) proponent for increasing the tax rate on America's wealthiest individuals, has drawn some ire from conservatives for, well, wanting to pay more taxes. The biggest attack against Buffett is to paint the billionaire as some sort of hypocrite. Buffett just asserts that he is only operating in a broken system - he has made numerous comments in the past regarding his tax situations and how he took advantage of tax breaks, etc.
“I knew I was getting favored treatment compared to the local doctor, lawyer or C.E.O.,” Buffett told The New York Times. “But I made no voluntary payments to the Treasury, nor does any hedge fund manager of whom I’m aware.”
The newest attack coming from the right seems to be targeting the lengthy tax dispute between Berhskire Hathaway - Buffett's company - and the Internal Revenue Service.
Bill Wilson wrote the following for Americans for Limited Government:
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.”This is where Wilson and McCarty starts to blur some lines to try and confuse the reader.
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.
McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004. The IRS examination team caught Berkshire Hathaway on at least some issues. Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”
He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to. Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is again threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”
McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years. One would expect they will find yet more issues.”
Now, most Americans, when they receive a tax bill from the government, they pay it. They don’t get an attorney. They don’t appeal the bill. They pay it — on time and in full. But not Buffett’s company, which apparently takes years to settle its liabilities.
Since this appears to be an ongoing pattern at the company, it becomes reasonable to ask: Is this some sort of internal company policy to delay paying taxes on time? If so, could this be construed as a form of tax evasion?
"[Buffett] says he’d happily pay more." said McCarty. "Except the IRS has apparently been asking him to pay more going on nine years."
The IRS has been asking Berkshire Hathaway - not Warren Buffett to pay more.
Wilson also cries that when receiving their tax bill the average American just pays it - they don't lawyer up - but again, Wilson is confusing Buffett with his company. This is an important detail because most businesses hire an accountant to help navigate the tax code and help reduce their tax liability - the average American does not have the resources to find those loopholes to help them pay less like their corporate cousins. This is exactly the point Buffett has been making with his calls to increase taxes on people like himself - the tax code benefits the wealthy allowing them to pay less than their fair share.
This doesn't make a difference - the folks at Big Government fell for the conservative meme that Buffett is a tax-dodging hypocrite, which means the rest of the conservative media is not too far behind.
You are so right. What these idiots overlook is Buffett owes a fiduciary duty to his shareholders to pay the least amount of taxes Berkshire legally owes. So they claim he is "short changing the IRS". Nothing could be further from the truth. The IRS has not assessed any negligence or fraud penalties. As a result, they admit it is a legitimate dispute. This happens every day and is the reason we have a Tax Court to resolve disputes such as this.ReplyDelete
What I think is funny is that the arguments the right makes against people like Buffett only bolster Buffett's call for reform.ReplyDelete
They point out some sort of "hypocrisy" but they really show that Buffett as an individual is able to pay little taxes on his personal fortune and Buffett the businessman is able to work the system, apply as many loopholes as possible, and claim as many write-offs as possible to reduce his company's tax liability and increase profitability.
If Buffett is doing it and he is a proponent of reform, imagine what those who support conservatives are doing...