Buffett:“When Charlie and I took this job,we did not agree to put our citizenship in a blind trust.”

[Scuba]

http://dealbook.nytimes.com/2012/05/07/reflecting-on-buffett-business-and-politics/?ref=business

Reflecting on Buffett, Business and Politics

OMAHA — “When Charlie and I took this job, we did not agree to put our citizenship in a blind trust.”

That’s what Warren Buffett said here over the weekend at Berkshire Hathaway’s annual meeting when confronted by a shareholder question complaining that Mr. Buffett had become a public advocate for President Obama and the so-called Buffett Rule, which seeks to raise the tax rate on the wealthiest Americans — many of whom were in the audience.

Mr. Buffett’s longtime business partner, Charlie Munger, vice chairman of Berkshire, quickly quipped that his partner’s position on taxes “has reduced my popularity around my country club.”

It also appeared to reduce Mr. Buffett’s popularity among some shareholders. His comments came after the investor had submitted a question, saying: “My 84-year-old father won’t invest in Berkshire because of your stance on taxes.” Mr. Buffett replied with a zinger: “Sounds like your father should buy stock in Fox.”

The rich are the world's worst whiners.

[JustAnotherGen]

1. I love Mr. Buffet

For his come back!

Mr. Buffett replied with a zinger: “Sounds like your father should buy stock in Fox.”

[freethought]

2. That is truly unreal!

Especially since a single share (That's right! ONE SHARE!) of Berkshire Hathaway stock goes for just over $123,000.00. Gee, do you have that much cash on hand to buy a single share of stock? If you do, it strikes me that, chances are, you don't have much to complain about.

[aquart]

3. My birthday's coming. A Berkshire Hathaway share would be a nice gift.

But probably I'll just get forks. (It's okay. I WANT the forks.)

[freethought]

4. They are easier to gift wrap too! :) n/t

[laundry_queen]

11. I think that's only the class 'A' shares though

I haven't looked, but I thought that BH also had class B shares that went through several splits (the reason the A shares are so much is they've never had a stock split because Buffet wanted the shares to reflect the true growth/value of the company from the beginning) and therefore are more affordable.

[former9thward]

5. I wish Buffett would pay his taxes.

It might help his position a bit. According to the IRS he owes about a billion in taxes back to 2002. http://www.huffingtonpost.com/2011/08/29/warren-buffett-taxes-berkshire-hathaway_n_941099.html

[azureblue]

6. BH is not WB

you do know the different between a business and a person, don't you? From the article:

Berkshire Hathaway, the eighth-largest public company in the world according to Forbes, openly admits to still owing taxes for years 2002 through 2004 and 2005 through 2009, according to the New York Post. The company says it expects to "resolve all adjustments proposed by the US Internal Revenue Service" within the next year.

This is Berkshire Hathaway Corporation, not Warren Buffet, working with the IRS to resolve corporate tax matters. And note the issue of underpayment is a matter of adjustments. This is very often a matter of a company claiming a deduction, that has been used for years, that is disallowed in an IRS review, then flagged for previous years as not allowed. It is not, as you insinuate a purposeful tax dodge, and this sort of "we thought it was an allowed deduction" happens often, even on personal taxes.

But I am curious as to why you cannot differentiate between a corporate entity and a person. Especially if you are the from the 9th ward. You should know that from your post - Katrina experiences..

[former9thward]

8. The 9th ward refers to a minor elected position I had in Chicago.

Not NO. Buffet is the founder and CEO of BH. He controls what they do. I suspect that if GE or Exxon were involved in this type of tax fight with the IRS -- going back almost 10 years now -- you would be complaining about how much of a tax cheat they were. Sorry I don't do the double standard.

[laundry_queen]

10. That person is right though

Companies often do adjustments to prior financial statements. Tons of things can change their net income for past years and thus the amount of tax owing. In accounting, so much of what is 'accounted for' is really tons of estimates. If those estimates change due to rule changes or company policy changes, sometimes, depending what it is, the rules state that you must restate your changes going back 'x' amount of years, which can result is more tax owing (or conversely, a future tax benefit). Very common in the business world.

[Zalatix]

18. I think both you and former9thward have points, but are coming at this from different perspectives.

IMO shit should roll uphill. The buck stops with Warren Buffett.

[DallasNE]

13. New York Post

That should set off red flags as should the word "adjustments". The B-H annual report on page 50 on income taxes states "deductibility is highly certain" but there is "uncertainty about timing of such deductibility".

In other words there is a dispute over which schedule applies for a deductible business expense and that affects the amount of the deduction in a given year and not over the tax amount due over time. In other words this sounds like a lot of to-do over nothing.

[former9thward]

15. Since you think the Post is making up a story let's go to the BH annual report.

Please see p. 54. http://www.berkshirehathaway.com/2010ar/2010ar.pdf The IRS is not allowing deductions that BH took. For two years 2009 and 2010 the deductions not allowed will cost them $2 billion if they ever pay it.

[DallasNE]

16. First, You Provided A Link

To the 2010 annual report and not the 2011 annual report, which I was quoting from. Second, there is no dispute over whether the deduction is allowed, only over the proper schedule to use which impacts which tax year the deduction gets written off and thus the tax liability over the years. The IRS is saying B-H is writing the expense off too rapidly. Should the IRS prevail they will get their nearly $2 billion now but will give it all back in future years, simply costing B-H the float for a few years so what is the big deal.

[former9thward]

20. I provided the only link I could find.

You provided no link in either post even though you quoted from it.

[DallasNE]

24. I Was Quoting From My Hard Copy

Of the B-H 2011 annual report they sent me as a stockholder about a month ago.

[former9thward]

27. Well at least you have disclosed your interest in this.

[Schema Thing]

42. and you could disclose your interest in being negative towards

most things Democrat.

[former9thward]

44. I don't believe in double standards.

Buffet and BH do not pay their taxes according to the IRS. Just because he talks the talk does not give a free pass in my book. Maybe you want to worship the billionaire, that is your business.

[Horse with no Name]

21. Might be worth talking about IF GE or Exxon paid taxes. n/t

[former9thward]

22. Exxon is probably the largest taxpayer in the country.

$73 billion in total taxes over the last five years.

http://www.washingtonpost.com/business/economy/how-much-do-oil-companies-really-pay-in-taxes/2011/05/11/AF7UNutG_story.html

Anyone pay more? I can't think of anybody.

[Horse with no Name]

23. "According to Exxon"

Same article

Not so, say critics of the oil industry; the Center for American Progress says the oil giant’s effective federal income tax rate is about half the 35 percent standard for U.S. companies. The liberal-leaning think tank, citing Exxon Mobil’s filings with the Securities and Exchange Commission, says the corporation didn’t pay any federal income tax in 2009.

[former9thward]

26. You said they did not pay any taxes.

They certainly pay more than BH or WB.

[Horse with no Name]

28. In 2009 they paid ZERO taxes

and half of the effective rate in other years.

So...no, they don't.

[former9thward]

29. You are picking the year of the economic collapse.

Alot of companies paid no taxes that year. How much taxes did BH pay that year?

[HiPointDem]

39. 35% isn't "standard" at all. that would mean most businesses pay that. they don't.

[Horse with no Name]

47. My point exactly BUT I was using the OPs own source. n/t

[HiPointDem]

37. Warren buffett *is* berkshire. he & "charley" control the company. and yes, it *is* a tax dodge.

and yes, buffett is a fraud.


As of July 1, 2010, Buffett owned 32.4% aggregate voting power of Berkshire's shares outstanding and 23.3% of the economic value of those shares.[14]

Berkshire's vice-chairman, Charlie Munger, also holds a stake big enough to make him a billionaire, and early investments in Berkshire by David Gottesman and Franklin Otis Booth resulted in their becoming billionaires as well. Bill Gates' Cascade Investments LLC is the second largest shareholder of Berkshire and owns more than 5% of class B shares.

http://en.wikipedia.org/wiki/Berkshire_Hathaway

You can control a company by just owning 5% of it. Buffett owns 1/3 on his own & his minions' shares (including his partner in fraud bill gates) bring that up even more.

[spooky3]

45. What is your source for claiming that "you can control a company by just owning (sic) 5% of it"?

[Lucky Luciano]

49. Point is that 5% is usually a very large stake.

Often top three shareholder or something like that. It is a lot of control. A lot of corporate activists by 5-10% of a company which gives them the leverage to raid the company if they can convince others to follow them - that 5-10% can give a lot of credibility for that kind of influence. Carl Icahn is the master of that.

[spooky3]

51. It is NOT control.

The key is in "if they can convince others to follow them" -- and that is influence, not control, since others can change their minds at any time. Further, that "if" can be true for someone with one share, and false for someone with 49% of the shares. The fact that you point to Carl Icahn as a case that stands out shows how rarely those without a large proportion of shares can exercise power. Ask the directors of the large public pension systems (who often held large stakes) how much control they feel they had in the last decade or so.

Control is 51%.

In the specific case of Berkshire, obviously Buffett is close to several like-minded shareholders, so together they likely wield a lot of influence. However, this is not the issue at all relevant to the BH tax dispute, as pointed out in my other posts, and in a link I provided to a tax attorney's site. Buffett and his team don't agree that the IRS is right, and that BH owes this. As that attorney points out, until the legal dispute is resolved, BH's management has a duty NOT to pay taxes they believe are not owed.

[Lucky Luciano]

53. Whatever. It is a ton of fucking power. nt

[spooky3]

48. He doesn't agree (yet) that Berkshire Hathaway owes this money.

In the article you posted from HuffPo, the author claimed Buffett admitted BH owed this money and linked to a New York Post (!) article as evidence. In fact, nowhere in either article did Buffett admit that BH owed this money. He described "adjustments" that the IRS "proposed" that apparently have been in dispute for a long time. He said he hopes that the issues would be "resolved" soon. But that is VERY different from agreeing to the proposals, admitting that the co. owes the $, but refusing to pay the balance owed.

It's the difference between being in the middle of a long lawsuit that you are hoping to settle, versus being convicted, but trying to avoid serving time.

Full disclosure: I am a former IRS employee. Hope this makes the picture clearer for you.

And, here's a similar take on the issue from a tax attorney, who says he doesn't agree with Buffett on the idea that the rich should pay more, but affirms that the BH tax issues are still in dispute, and questions why certain right wing sources take a position like the one you seem to be taking:

http://www.pappasontaxes.com/index.php/2011/08/26/buffetts-berkshire-hathaway-is-disputing-irs-tax-assessment/

[former9thward]

50. Of course he doesn't admit it.

As the CEO he is going to be very aggressive about keeping his company's tax bill as low as possible. Which is why I don't see him as the great spokesman for raising taxes. He is just another billionaire trying to keep what is his. He lives in the glass house of BH and he is throwing stones. I don't buy it.

[spooky3]

52. Everyone is entitled to his/her own opinions, but not to his or her own facts.

The tax issues are still in the legal system. Fighting in the legal system is NOT what CEOs automatically do.

Your arguments simply are not based on facts, so you aren't going to convince many here.

[former9thward]

54. How about the fact that Buffet evades the estate tax.

He has put his funds in trusts to be run by his children when he dies. The government will get none of his money. But since that is 'legal' I am sure you are alright with that too. Everything I have posted comes straight from the BH annual report so if someone does not want to be convinced they should take it up with them. See page 54. http://www.berkshirehathaway.com/2010ar/2010ar.pdf

[zzaapp]

7. Loves me some Buffett

[DallasNE]

9. What Do You Want To Bet

That the 84-year old father would be unaffected by the "Buffet Rule". And that is what makes this so irrational. These people are truly stupid.

[progressoid]

12. “Sounds like your father should buy stock in Fox.”

[Skinner]

14. Awesome.

Love it.

[spooky3]

31. Zing! Some rich forget that being mega-rich

Means you don't have to suck up to anyone for approval.

[jtuck004]

17. Ha. K&R. n/t

[davidwparker]

19. good comeback n/t

[Thrill]

25. Greed is sad

[Angry Dragon]

30. Let's go back to the days of top tax rate of 70%

I could live with that

[Why Syzygy]

32. Rather stunning tongue twister

He is speaking as the Chairman of a CORPORATION. Said corporations have been egregiously ruled to have 'citizenship' status. At the same time he is claiming personal CITIZENSHIP. Sure is a lot of citizenships.

How is any of this stench not the same as poll taxes? The bigger you are the more votes you get!

Is anyone else really disgusted with the current state of CITIZENSHIP affairs?

eta: and btw, How dare he! You can bet Hathaway is not sitting out this election cycle. Why should their board Chairman? hah!

[Skittles]

33. thanking Mr. Buffett

[Festivito]

34. How did Steven King put it: Some would set themselves on fire rather than pay a dime in taxes.

They're nutty.

[HiPointDem]

35. wtf is buffett talking about? berkshire is in arrears on its tax bill & fighting paying it. he put

billions into untaxed foundations that he, his pals or his family control and use politically (in the largest sense).

his folksy schtick is public relations.

[Scuba]

36. Addressed above.

[HiPointDem]

38. not addressed at all. rationalized. cause buffett is a democratic donor.

[Scuba]

40. Addressed does not mean "satisfies all". Just addressed.

[HiPointDem]

41. i could "address" it by saying buffett is zeno from mars and therefore doesn;t have to pay taxes.

[Schema Thing]

43. no, it couldn't be addressed that way. It was addressed with pertinent facts. deal with it.

[HiPointDem]

46. warren buffett owns 1/3 of bh's voting stock and his minions control more. he controls the

company. so the poster didn't address the criticism anymore than i did by claiming wb is from mars.