Warren Buffett called Donald Trump’s bluff and made his taxes public. The chief of Berkshire Hathaway is actually very proud of the fact that he has always paid federal income tax.
Although he is not running for the office of president, Warren E. Buffett displayed a level of transparency that many would like to see in a presidential candidate. He voluntarily made public information about his income taxes that he has paid since 1944.
Donald J. Trump Accuses Warren E. Buffett of Tax Avoidance
During the second presidential debate on Sunday night, Donald Trump mentioned Warren Buffett as he was trying to move on from a question regarding his own taxes. The Republican candidate called out the billionaire investor for using the same strategies that he himself has used to not pay tax.
Warren Buffett reacted by releasing his income taxes the next day. Providing more information than the man who is running for president ever has, Buffett sought to disprove Trump’s allegations.
During the presidential debate, Donald J. Trump finally acknowledged that he used a loophole to avoid paying federal income tax for several years. Trump claimed losses of almost one billion dollars in 1995. That allowed him to dodge paying tax for a while. However, Donald Trump still wouldn’t acknowledge that he was in the wrong. Instead, he tried to make it look like what he did was standard practice and that everybody does the same. Donald Trump attempted to shift attention to the Democratic candidate, Hillary Clinton. He said that Clinton is supported by people who exploit tax laws for their benefit as well. Trump accused Clinton’s wealthy backers of using the same practices he used. Trying to make it look like Hillary Clinton and her supporters were no better than him.
“Many of her friends took bigger deductions. Warren Buffettt took a massive deduction.”
Said Donald Trump during the presidential debate.
Warren E. Buffett’s Record with Paying Taxes
Warren E. Buffett also wrote a letter that he released on Monday with his taxes. In the letter he states that he has not avoided paying tax.
“I have paid federal income tax every year since 1944.”
Said Warren E. Buffett.
The tax return for 2015 shows that Warren Buffett had an adjusted gross income amounting to $11,563,931. His deductions for that year were $5,477,694. About two thirds of those deductions were charitable contributions. The rest were related to payments of state income tax.
In the year 2015, Warren E. Buffett paid $1,845,557 in federal income tax. Tax returns for other years are similar with regard to tax rates and deductions that Buffett took.
So, last year, 16 percent of Buffett’s reported income was paid in federal income tax.
Warren E. Buffett said in his letter that he has copies from all of his 72 returns since he started paying tax at age 13. He stressed that none of his returns uses a carry forward. A carry forward is a provision that can be used to not pay tax. It allows taxpayers to use the losses registered during one fiscal year to avoid paying federal income tax. It can apply to future years as well as some previously filed tax returns. It is this carry forward provision that Donald J. Trump used in 1995.
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