Fact Check: Warren Buffett Allegedly Said if Billionaires Paid Fair Share, No One Else Would Have to Pay Taxes Again. We Checked the Transcript
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Claim:
In May 2024, U.S. billionaire investor Warren Buffett said, "If you don’t like paying taxes, make billionaires pay their fair share and you would never have to pay taxes again."
Rating:
On May 13, 2024, a viral post on Reddit featured a video of Warren Buffett claiming that the Berkshire Hathaway chairman and CEO had said that if billionaires paid their fair share in taxes, no one else would have to:
“If you don’t like paying taxes, make billionaires pay their fair share and you would never have to pay taxes again.” —Warren Buffett
by u/trialcourt in FluentInFinance
The post had gained 35,000 upvotes and garnered 3,500 comments as of this writing. Another post by the same user appeared on another subreddit with the same video and wording, and had garnered 1,500 upvotes and 200-plus comments.
In the video clip, Buffett said:
We don't mind paying taxes at Berkshire, and we are paying a 21% federal rate. If we send in a check like we did last year, we sent in over $5 billion to the US federal government. And if 800 other companies had done the same thing, no other person in the United States would have had to pay a dime of federal taxes, whether income taxes, no Social Security taxes, no estate taxes, no… . It's open down the line.
The video didn't confirm the exact quote, so we searched for where the clip came from, seeking more context and the exact wording. We found it was part of the livestream of Berkshire Hathaway's annual shareholders meeting, which took place on May 4, 2024 (the quote starts at 24:24 mark). We also found the full transcript of the meeting.
Not the Billionaires
A word search of the transcript revealed Buffett never said the word "billionaire" during the meeting. It also showed that the clip missed some context.
Buffett was in fact explaining the taxes Berkshire Hathaway had to pay on the sale of Apple stock (we reported on this in March 2024). He went on to say that he was pleased to pay such taxes as a way to give back to the government of a country, the U.S., that had been so "generous" with his company's owners. Here is Buffett's quote in full (we've edited it for readability and have added emphasis):
We don't mind paying taxes at Berkshire, and we are paying a 21% federal rate on the gains we're taking in Apple. And that rate was 35% not that long ago, and it's been 52% in the past, when I've been operating. And the federal government owns a part of the earnings of the business we make. They don't own the assets, but they own a percentage of the earnings, and they can change that percentage any year. And the percentage that they've decreed currently is 21%.
And I would say with the present fiscal policies, I think that something has to give, and I think that higher taxes are quite likely, and if the government wants to take a greater share of your income, or mine, or Berkshire's, they can do it. And they may decide that someday they don't want the fiscal deficit to be this large, because that has some important consequences, and they may not want to decrease spending a lot, and they may decide they'll take a larger percentage of what we earn and we'll pay it. We always hope, at Berkshire, to pay substantial federal income taxes.
We think it's appropriate that a company, a country that's been as been as generous to our owners, it's been the place… . I was lucky. Berkshire was lucky, was here. If we send in a check like we did last year, we sent in over $5 billion to the US federal government. And if 800 other companies had done the same thing, no other person in the United States would have had to pay a dime of federal taxes, whether income taxes, no Social Security taxes, no estate taxes, no… . It's open down the line.
Now… That's… I would like to… I hope things develop well enough with Berkshire that we say we're in the 800 club and maybe even move up a few notches. It doesn't bother me in the least to write that check. I would really hope, with all America has done for all of you, it shouldn't bother you that we do it. And if I'm doing it at 21% this year and we're doing it at a higher percentage later on, I don't think you'll actually mind the fact that we sold a little Apple this year.
Buffett wasn't talking about billionaires per se paying their fair share in taxes. He did say that the top 800 in the U.S. companies should pay their taxes and argued that if they did, no other person would have to pay federal taxes, including income or estate taxes or social security.
Does the Math Add Up?
While it seemed a ludicrous claim, the 93-year-old billionaire may have been correct in his math. An Iowa news outlet, Iowa's News Now, calculated that — based on the 2023 tax revenue of the top 100 U.S. companies — ensuring that the country's top 800 companies pay their taxes might go a long way toward reducing the fiscal deficit and covering the government's revenue needs:
If all 100 paid the same tax rate as Buffett's Berkshire-Hathaway, it would result in more than $2 Trillion in tax revenue for the U.S. Government, or nearly half of all tax revenue that currently comes into the U.S. Treasury.
Of course, a number of those companies do pay some sort of taxes already, but if you took the top 800 companies as Buffett suggests, it is possible that deficit spending could be greatly reduced, while eliminating taxes paid by citizens.
It's not the first time Buffett has expressed himself about the importance of paying taxes or of solving the problem of the deficit. We reported in 2021 on a quip he made about fixing the budget deficit.
Sources:
'Berkshire's 2024 Annual Shareholder Meeting: Watch the Full Morning Session'. CNBC, https://www.cnbc.com/video/2024/05/04/berkshires-2024-annual-shareholder-meeting-watch-the-full-morning-session.html. Accessed 14 May 2024.
Mikkelson, Barbara. 'Did Warren Buffett Suggest This Plan That Could Fix the Budget Deficit?' Snopes, 23 Oct. 2011, https://www.snopes.com//fact-check/hometown-buffett/.
Rascouët-Paz, Anna. '"Something's Up" With US Economy Due to High-Profile Stock Sales?' Snopes, 8 Mar. 2024, https://www.snopes.com//news/2024/03/08/waltons-zuckerburg-buffet-selling-stock/.
Transcript: Berkshire's 2024 Annual Shareholder Meeting. 2024, https://steadycompounding.com/investing/brk-2024/.
Weig, Nick. '"Oracle of Omaha" Says If Top Companies Paid Tax like His, Americans Wouldn't Pay Anything'. KGAN, 4 May 2024, https://cbs2iowa.com/news/local/oracle-of-omaha-says-higher-taxes-necessary-but-not-on-americans-corporations-economy-national-debt-warren-buffett.
Wolfers, Justin. 'Taxes, Warren Buffett, and Paying My Fair Share'. Freakonomics, 1 May 2008, https://freakonomics.com/2008/05/taxes-warren-buffett-and-paying-my-fair-share/.
