Mike Kueber's Blog

March 12, 2012

Is Warren Buffett a hypocrite?

Filed under: Business,Issues,Politics — Mike Kueber @ 11:02 am
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While visiting with my conservative drinking friend last Friday, I was informed that conservative talk radio was all over Warren Buffett for his alleged hypocrisy in arguing for increased income taxes on the rich while at the same time his company Berkshire Hathaway was engaged in tax litigation with the IRS in order to avoid paying almost a billion dollars of corporate income tax.  My friend and I quickly got into a heated argument as I tried to explain that those positions are not inconsistent because Buffett’s argument for increased taxes is a personal opinion whereas Berkshire’s IRS litigation against paying taxes is a corporate position.  Without resorting to discussions of logical fallacies, I suggested to my friend that as a stockholder in Berkshire I would be pissed if Buffett let his personal opinion regarding higher personal taxes to control his corporate actions regarding Berkshire’s payment of taxes.  Not surprisingly, my friend wasn’t buying that.

When I got home, I decided to see what stirred up this matter, and sure enough there was an article in the Huffington Post.  I’ve read that conservative radio tends to draw its stories from the Huffington Post and The Drudge Report, so the recent spate of Buffett stories tends to confirm that connection.  In its article, the Huffington Post pointed out a new example of Buffett’s alleged hypocrisy – i.e., one of Berkshire’s subsidiaries, NetJets, apparently hired a “squadron” of K Street lobbyist to secure favorable tax treatment in Congresss for private jet companies, of which NetJets is the biggest.

This example is equivalent to the Berkshire tax litigation with the IRS and is flawed for the same reason – i.e., Buffett’s personal views regarding personal income tax shouldn’t influence the actions of Berkshire and its subsidiaries.  Obviously, they should pay as little in tax as the law requires, and they should not be precluded from legally lobbying for lower taxes. 

Wearing two hats – one corporate and one personal – does not make Buffett a hypocrite.    

 

 

 

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3 Comments »

  1. I agree with you. I happen to be a conservative and a Berkshire investor. It ticks me off how Buffett is going all around giving his opinions on national matters and often providing half the story. Then IMO, controversy causes Buffett’s reputation to fall, which causes Berkshire to fall.

    But, aside from that, there isn’t anything hypocritical about giving opinions on how a tax system should be set up, then doing your job as CEO by trying to pay the lowest possible taxes.

    Comment by AL — March 12, 2012 @ 12:01 pm | Reply

  2. agreed. he has an !obiligation! to pay the minimal tax possible.

    q

    Comment by Q — March 13, 2012 @ 12:54 pm | Reply

  3. corpreately related i mean…

    q

    Comment by Q — March 13, 2012 @ 12:54 pm | Reply


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