In a response to Warren Buffett’s recent claims to raise taxes, the New York Post did some digging. The editorial, “Warren Buffett, hypocrite,” points out that Berkshire Hathaway (the company of which Mr. Buffett is the Chairman, CEO, and primary shareholder) owes back taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es dating back to 2002. What’s more, the firm’s annual report acknowledges that additional back taxes are owed from the years 2005-2009.
Back taxes are nothing new for any corporation. Disputes which concern taxes owed frequently linger for years. Thus, the fact that Berkshire Hathaway owes back taxes is not surprising.
However, this is not the point of the editorial. The objective is to draw readers’ attention to relevant information conspicuously left out of Mr. Buffett’s strong advocacy of higher taxes on the wealthy. His failure to discuss this information is akin to his failure to disclose his decreased tax liability due to his philanthropic actions. One can’t help to seriously consider the question in the Post:
Obvious question: If Buffett really thinks he and his “mega-rich friends” should pay higher taxes, why doesn’t his firm fork over what it already owes…?
Equally obvious answer: Mr. Buffett is acting in his self-interest. As the primary shareholder of Berkshire Hathaway, paying less in corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. leads to more money flowing into his pockets.
His actions are logical. His public statements, however, are simply duplicitous.
Follow David Logan on Twitter @LoganomixShare