Warren Buffett slammed for avoiding tax after calling for higher taxes on the rich: 'Hypocrite'

ProPublica claimed that Warren Buffett's real income tax rate is 0.1 per cent and that he minimizes tax bill by keeping his fortune in Berkshire Hathaway


                            Warren Buffett slammed for avoiding tax after calling for higher taxes on the rich: 'Hypocrite'
Warren Buffet was slammed for avoiding paying tax (Photo by Dimitrios Kambouris/Getty Images)

A load of IRS data on the tax returns of thousands of the nation’s wealthiest people including Warren Buffett, Bill Gates, Rupert Murdoch, Mark Zuckerberg, Elon Musk, Jeff Bezos covering more than 15 years was obtained by ProPublica. The said data provides a look inside the financial lives of America’s billionaires. It shows their income, taxes, investments, stock trades, gambling winnings and even the results of audits.

In an investigative report published on June 8, ProPublica claimed that Buffett's real income-tax rate is 0.1 per cent and that he minimizes his personal tax bill by keeping his fortune in Berkshire Hathaway stock and not paying a dividend. ProPublica reached its conclusive report by analyzing Buffett's income-tax returns between 2014 and 2018. The website claimed that even though Buffett's wealth grew by $24 billion during that period, he only reported $125M of income and paid just $24M in taxes. This put his 'true tax rate' below the near about 1 per cent paid by Amazon CEO Bezos and much below the 3.3 per cent paid by tech billionaire Musk. "No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire," ProPublica said.

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What did Warren Buffett say in his defense?

Buffett defended himself in a detailed statement explaining and emphasizing that his shareholders don't want a dividend. He also mentioned that he's on the way to give virtually all of his money to notable causes. Responding to ProPublica's claims that he hoarded his money in Berkshire stock and eschewed a dividend to keep his tax bill low, Buffett presented a 23 pages long document, which contained a written statement, as well as excerpts from several of Berkshire's annual reports, news releases and photocopies of newspaper and magazine stories.

Warren Buffett (Photo by Paul Morigi/Getty Images for FORTUNE)

Buffett noted that Berkshire shareholders prefer the company to reinvest its profits instead of paying a dividend because they know a big portion of the funds will ultimately go towards good causes. "Many large shareholders, including me, enjoy the long-term buildup in value, knowing that it is destined for philanthropy, not consumption or dynastic aspirations," Buffett said. In short, Buffett emphasized that Berkshire doesn't pay a dividend because the vast majority of its shareholders don't want one, and not because he wants to lower his personal tax bill.

Buffett also mentioned that he prefers to hand his cash to charities, instead of giving it to the federal government. "I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt," he said. Buffett also attached photocopies of a Fortune cover story from 1986 to his statement, which was titled, "Should you leave it all to the children?" and included his advice on how much to pass down: "Enough money so that they would feel they could do anything, but not so much that they could do nothing."

Warren Buffett, chairman of Berkshire Hathaway Inc., arrives for the Allen & Company Sun Valley Conference on July 8, 2014, in Sun Valley, Idaho (Photo by Scott Olson/Getty Images)

'Warren Buffett the Advocate of Higher Taxes'

The internet reacted to ProPublica's reveal, slamming Buffett for using tax-avoidance strategies, which are beyond the reach of ordinary people, despite being 'Uber wealthy'. One user wrote, "Warren Buffett swims in billions of dollars, pays little income tax, and hasn't done shit to protect our democracy. He doesn't care about #democracy, so democracy will go away."

Another commented, "Warren Buffett the Advocate of Higher Taxes&pay your share, paid a “true tax rate “ of 0.1% why are the Uber wealthy so concerned with the tax rates of average Americans? if they are so concerned w/fair share .. pay up, there is a line on taxes to pay more, use it, Buffett." One tweet read, "Personally enjoyed Warren Buffett having the lowest tax rate of them all. would not have been my first choice!" One user hilariously commented, "Which is the most likely outcome of this becoming public: 1. A change in tax law 2. Elon Musk, Jeff Bexos and Michael Bloomberg hire Warren Buffett's accountants."

One said, "Warren Buffet could afford to be a Democrat at the rates even Bernie Sanders thinks are fair, but Buffet apparently prefers to pay like a Republican?! Isn't he a hypocrite? "Secret IRS Records Reveal How the Wealthiest Avoid Income Tax" ProPublica." Another said, "Warren Buffet is a hypocrite. “No one among the 25 wealthiest avoided as much tax as Buffett. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich.”



 



 



 



 

 



 

 



 

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