Warren Buffett: High Corporate Taxes Are An American 'Myth'

Billionaire investor Warren Buffett speaks in Omaha, Neb., Monday, Nov. 14, 2011, at an event to raise money for the Girls Inc. charity organization. (AP)

Corporations, like the rich, aren't paying their fair share in taxes, billionaire investor Warren Buffett told CNBC on Monday.

Even while enjoying record profits, corporations last year paid just 12.1 percent of those earnings in taxes, their lowest tax rate since 1972, according to the Congressional Budget Office. At least thirty of the country's most profitable companies had a negative tax rate between 2008 and 2010.

Buffett, for one, says it's time to take notice.

"It's a myth that American corporations are paying 35 percent or anything like it," Buffett said, referring to the top marginal corporate tax rate. "Corporate taxes are not strangling American competitiveness."

Buffett's comments come alongside a larger debate over the tax rates of corporations and individuals. President Obama recently announced a corporate tax reform plan that would look to eliminate loopholes while lowering the top marginal tax rate. In addition, Obama's budget proposal includes a provision, named after Buffett, that would require Americans making more than $1 million to pay at least a 30 percent tax rate.

Buffett said that current corporate tax rates are low both by historical standards and compared to other industrialized countries, or "far, far, far below what we’ve seen in the United States."

Many corporations pay a tax rate far below the top marginal rate. Industrial machinery companies, led by General Electric, paid a negative tax rate of minus 13.5 percent of their profits in federal income taxes between 2008 and 2010, according to a recent analysis. Information technology companies paid taxes at a 2.5 percent rate, utilities companies at a 3.7 percent rate, and financial corporations at a 15.5 percent rate.

Buffett disclosed that his company, Berkshire Hathaway, paid a corporate tax rate of between 15 and 16 percent of its income in 2011, higher than the national average. Though raising the corporate tax rate would cost Berkshire Hathaway more money, Buffett said it was crucial to put aside special interests.

"Once you start cherry-picking, the whole thing disintegrates," he said. "Why not have a code we don't like that at least is sustainable as opposed to one that's unsustainable?" he added.

Comments

[Jacqueline Marshall]

06:58 AM on 04/19/2012

How refreshing to listen to someone with such wealth who is so open and honest. Warren Buffet is not interested in his wealth but in what it can do for mankind.

[MarkWitzer]

12:40 AM on 03/16/2012

This is what I have been saying for years. We are, to put it in the words of the late Ted Kennedy, fundamentally an under-taxed nation. We need to be taxes at a much higher rate and our corporations included in this. All of the problems that we are facing right now as a country are do to the fact that the rich have been able to manipulate the system to benefit themselves and only themselves. They have done this at the expense of the American worker and middle-class. If you look at their tax brackets for 2011 it will ring clear to you that we are undertaxed. But really, i encourage anyone and everyone to look at the, www.taxbrackets2011hq.com. All you need to do is look at this and you will see, without question, that we should be asking more of the wealthy in this country. We are shoveling most of the burden on these working class families who cannot afford it. We should ask the rich to pay their fair share. For goodness sake, most of them are asking us to tax them at a higher rate anyway. What is keeping us!

[thereisonlyoneparty]

01:03 AM on 03/05/2012

Buffett's positions are odd.

The law taxes on corporations are in part thanks to the ability of corporations to get tax breaks and incentives for doing business that is generally necessary anywise.

State and federal governments are bending over backward to give companies money.  Companies would be stupid not to take them.  Cutting one's tax rate--all the way to nothing--is just good business.

[Steel5]

09:53 PM on 02/29/2012

I mean to say, taxes have a massive effect on if money is invested in the United States or elsewhere. Getting rid of loopholes is good, though, yes, but raising taxes discourages investment in the U.S.A.

[cristoballs]

10:29 PM on 02/28/2012

warren buffet: "i have no position on oil..."
for someone who doesn't have a position on oil, you have to wonder why berkshire hathaway has a $2.3 billion stake in conocophillips.

[El Justiciero]

03:43 PM on 02/29/2012

Again, all I see from the Buffet detractors is fingers frantically pointing to the messenger as if to distract us all from the message. His character is quite easy to attack. He probably couldn't have acquired such wealth otherwise. So what do you have to say about the message? anything?

[cristoballs]

11:20 PM on 02/29/2012

frankly, he's full of b.s. it's easy to look at a hanful of u.s. businesses who are paying a low effective corporate tax rate. however, when you look at study after study, the fact is the average corporate income tax rate is well above the average for other industrialized nations. on top of that, other countries do not double tax like we do in the u.s. what do i mean that? well, other countries will either tax corporate income or tax dividends. if both are taxed, the amount paid in dividends is deductible from the amount of taxable corporate income. only in the united states are dividend payments taxed seperately from corporate income and those dividend payments are not deductible from corporate income. further, this only takes into consideration taxes at the federal level. when you combine state corporate income and dividends taxes, the situation is much worse.

[janmB]

06:48 PM on 02/28/2012

Capitalism's first priority has never been---nor ever will be the satisfaction of social need. US Corporations are sitting on around $1.9 trillion in surplus while millons are jobless or underemployed. I cannot imagine anything more financically un sustainable irrational and inefficient and unethical than an economic system that refuses to match surplus capital with surplus workers and machinery. After all, what is the market without morality ? Freedom without fairness? Efficiency without ethics.
Corporations love the 35% tax rate that makes them LOOK like they pay big taxes but their accountants make certain that all the loopholes and writeoffs are being implemented so that many pay hardly anything at all.

[cristoballs]

10:32 PM on 02/28/2012

liberalism 101: "US Corporations are sitting on around $1.9 trillion."
really?!? so, that money is just in some shoebox stowed away under their beds? people amaze me with their ignorance. they assume because money isn't in the hands of the government, that rich people are just sitting on it, not doing anything with it.

[El Justiciero]

02:50 PM on 02/29/2012

Excuse him.... it's padding unrealistic and unsustainable executive pay, bonuses, and golden parachutes as their companies crash & burn, and going into offshore accounts, 5th & 6th homes, multiple cars, corporate jets, estates, mistresses, ex-wives, dominatrixes, yachts, and setting up trust funds for the next hundred generations of their families.

[nyjjc]

06:03 PM on 02/28/2012

Here's the problem:

Liptonheads think they support capitalism, but in reality, they support "Gekkoism".

Conversely, liberals support traditional capitalism, and not "Gekkoism", but are derided as being "socialists".

Change the narrative. Use the word "Gekkoism" in the same rhetorical sense that the Liptonheads use "socialism". People today are lazy, and don't want the facts. They want slogans. There's our new slogan.

Then see how fast we can resolve all sorts of issues if we start beating the Liptonheads on the rhetoric/hyperbole front.

[David Engage America]

05:17 PM on 02/28/2012

Some of the corporate reform the President proposes makes sense (like reducing the tax rate), but other aspects do not. http://bit.ly/Ajw214

The first problem is that the proposal calls for adding special-interest tax breaks to the tax code (giving manufacturer’ a lower tax rate) which only leads to more tax unfairness. http://bit.ly/wQjofx

The second problem is that by putting a minimum tax on foreign profits, the US would be moving in the opposite direction of how our international trading partners treat foreign income. http://onforb.es/zukjhh

Experts agree that these are not the types of changes Congress should make to the corporate tax code. http://bit.ly/wkIlN5

[NedraD SF]

03:45 PM on 02/28/2012

Eliminate subsidies.
Tax corporations at higher rates if they outsource jobs over-seas and eliminate the benefit to those corporations to outsource.
It's ridiculous that GE, the largest corporation in America, is paying no taxes.
Yet many Americans are dumb enough to buy into the "50% of Americans aren't paying taxes" nonsense that the GOP is spitting out. That 50% has no money!

[Lightoward]

02:50 PM on 02/28/2012

Being that we have lived with the Bush tax cuts prior to and through the financial disaster and the recession, how is it that the GOP mantra that lower taxes fires up business and creates jobs still has any credibility at all. Why isn't this falsity put to bed easily and once and for all by simply asking, "Where are the Jobs if that is the way to job creation"?

Since it is so obviously a false claim, why would we ever want to elect a GOP administration to double down on what is so obviously a failure?

Why this argument is repeated over and over by the Dems is beyond comprehension. Somehow, they seem to be cowered by the GOP falsity.

[Lightoward]

02:52 PM on 02/28/2012

Ooops, should read, "Why this argument ISN'T repeated over and over [...]"

[thecornerangel]

02:42 PM on 02/28/2012

Buffett knows that capitalism has to be regulated against the natural excesses of corporate greed.
Buffett knows that corporations are supposed to supposed to slug it out against each other, not against the government.
We had a revolution to get away from a single corporation called the King. We fought for "no taxation without representation."
We set up an "experiment in democracy," where citizens elect a government to balance competing interests so that everyone has a chance to get a piece of the pie.
Buffett knows that taxes are the weight on the scales.
Buffett knows that our elected representatives are not collecting and using tax money to maintain the balance.
Buffett is telling us to elect representatives that will put us back in balance.

[SofaKing22]

01:45 PM on 02/28/2012

We could make corporate taxes 50% and they will still find a way to get that down to the negatives and therefore get a refund. It doesn't matter what the corporate tax rate is or where we rank. What's the point of corporate tax rates if you don't collect barely anything from them. Shouldn't the government act like a corporation and if it's cashflow is running low it needs to find another source of income or just get more income from what they already make. Corporations raise their prices all the time. I used to pay $3.14 for a value meal at McDonalds when I was in high school. The same value meal is now well over $5.00 and the only they did was rename the sizes. Or do corporations just say well let's make some adjustments and stop buying some things. We don't need cleaning supplies because people should be responsible to clean up after themselves. Probably don't need healthcare either because people should be responsible enough take better care of themselves. How many corporations you know just keep cutting costs and therefore quality? I'm guessing they look for new ways to make more money either in new products or already existing products. Maybe corporations need to follow the lead of the unions at GM which had record profits this year and give up a little more for the success of the whole company and therefore more success themselves.

[Hoosierbrad]

01:54 PM on 02/28/2012

Ask the rich of the country to actually sacrifice for the good of others? That smacks of socialism - to them. They want all the sacrifice on the poor and middle class.

[El Justiciero]

02:55 PM on 02/29/2012

"For the good of society," "the good of the country," & "the good of us all" are now demonized and frightening concepts to half of Americans who are too self absorbed to think about anything as they mass consume cheap slave-made products that will be in a landfill within 6 months and as they leave all the lights on in unoccupied rooms.

[mrdude9]

09:43 PM on 03/05/2012

So the "poor" sacrifice by being moochers, looters and parasites?? How do the "poor" sacrifice??? They pay no Federal income tax. They get free food through food stamps. Free cell phones, their utility bills paid for them, free section 8 housing etc.... Screw the poor! It is the middle class that is footing the bill for them!

[Antikytera]

12:49 PM on 02/28/2012

I wonder how many here are posters hired by some "spin-think-tanks" to divert the comments from what is being said. The negative comments seems so dumb to me and they are repeated over and over again. Spam and Gish-galloping is a known tacktic used by people trying to hide the truths.

[El Justiciero]

02:56 PM on 02/29/2012

What I wonder is what is the point of paying people to fill comment sections on news & blog sites. IS anyone swayed by such nonsense? If anything, I think it pushes me to be more aware, more involved and more of an activist.

[El Justiciero]

03:00 PM on 02/29/2012

in case I was unclear, I meant the nonsense spewed by right-wing-think-tank paid posters. They're all over any story about Warren Buffet, Al Gore, Global Warming, Climate Change, & the Environment. They always have 0 to 10 friends and they seem to post exclusively on those stories.

[Aerin Gael]

12:41 PM on 02/28/2012

wow so this is where the conservatives hang out on HuffPo. Newsflash guys: taxes for the wealthiest and corporations ARE going to increase. You have done extremely well in part because your revenue contribution to this country has sunk to historical lows. "http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213"
It's time to pony up and do your part now.

[omnioasis]

12:40 PM on 02/28/2012

Buffet was arrested in sept 2011 for tax evasion, he sat in fed jail in Dc for all of 17 minutes, the president pardoned him, so he could attend a press conference on the Buffet tax.

tax-evasion.org/tag/irs/

[OneInEveryFamily]

12:46 PM on 02/28/2012

No he was not. That story is from whe world weekly.

[Hoosierbrad]

01:54 PM on 02/28/2012

Lie