Buffett touts Berkshire’s record tax payments, urges government to spend

Berkshire Hathaway chairman and CEO Warren Buffett on Saturday released his annual letter, which touted the company’s record-setting tax payments last year and urged the federal government to spend the money wisely.

Buffett recalled how, when he first bought Berkshire Hathaway 60 years ago, his longtime business partner Charlie Munger warned him that what was then a large textile business was “headed for extinction,” as indicated by its inability to generate profits and pay taxes at the time.

“The U.S. Treasury, of all places, had already received silent warnings of Berkshire’s destiny,” he wrote. “In 1965, the company did not pay a dime of income tax, an embarrassment that had generally prevailed at the company for a decade. That sort of economic behavior may be understandable for glamorous startups, but it’s a blinking yellow light when it happens at a venerable pillar of American industry. Berkshire was headed for the ash can.”

“Fast forward 60 years and imagine the surprise at the Treasury when that same company – still operating under the name of Berkshire Hathaway – paid far more in corporate income tax than the U.S. government had ever received from any company – even the American tech titans that commanded market values in the trillions,” Buffett wrote. 

WARREN BUFFETT’S ANNUAL LETTER TO BERKSHIRE HATHAWAY SHAREHOLDERS: READ HERE

Berkshire Hathaway chairman and CEO Warren Buffett touted the company’s record tax payments in his annual letter. (J. Kempin/Getty Images / Getty Images)

“To be precise, Berkshire last year made four payments to the IRS that totaled $26.8 billion. That’s about 5% of what all of corporate America paid. (In addition, we paid sizable amounts for income taxes to foreign governments and to 44 states.)”

Buffett added that the company’s aggregate income tax payments to the U.S. Treasury over time have reached an aggregate $101 billion, and noted that the company only paying out one dividend in the past 60 years allowed the conglomerate to build its base of taxable income over time.

BUFFETT’S SURPRISE NOVEMBER LETTER TAKES PERSONAL TONE

The value investor, known for holding stocks over the long term, also touted his top investments.

“We own a small percentage of a dozen or so very large and highly profitable businesses with household names such as Apple, American Express, Coca-Cola and Moody’s. Many of these companies earn very high returns on the net tangible equity required for their operations”, he said.

Buffett went on to discuss the value of capitalism, which he said has faults and…