At Berkshire Hathaway’s 2024 annual meeting, billionaire investor Warren Buffett made headlines with a bold claim about corporate taxes. Noting Berkshire Hathaway’s significant federal tax contributions, Buffett suggested that if 800 other companies matched Berkshire’s federal tax payments, “no other person in the United States would have had to pay a dime in federal taxes — no income taxes, no Social Security taxes, no estate taxes.”
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Buffett explained that Berkshire sent more than $5 billion in federal taxes to the U.S. government in 2023. He emphasized that his company and its shareholders feel a responsibility to contribute to the country’s economy, especially since the American system has provided many opportunities and benefits.
“We always hope at Berkshire that we can pay substantial federal income taxes,” Buffett said, adding that he believes it is appropriate for the company to contribute in this way.
Buffett also discussed the broader implications of tax rates and government spending. Currently, Berkshire pays a 21% federal tax rate on income from investments such as Apple stock. At one point the corporate tax rate was 52%.
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According to Buffett, the federal government essentially owns a percentage of Berkshire’s earnings and can change its share whenever necessary. Buffett speculated that taxes could rise again soon, especially as the growing budget deficit continues.
U.S. national debt has reached substantial levels, and Buffett acknowledged at the meeting that higher taxes from companies like Berkshire Hathaway could help offset this challenge. “They may one day decide that they don’t want the budget deficit to be that big because that has some important consequences,” he noted.
While Buffett’s statement about 800 companies potentially covering all federal taxes for Americans was striking, this figure reflects the reality of Berkshire’s tax contributions compared to other companies. Buffett highlighted the impact that large corporations can have on the tax base and expressed his long-standing belief in the importance of companies meeting their tax responsibilities.
