Buffett: Congress will eventually pass fiscal plan
By JOSH FUNK
The Associated press | November 29,2012
OMAHA, Neb. — Billionaire Warren Buffett said Wednesday he’s confident that Congress will eventually pass a plan to address the so-called fiscal cliff, even if it doesn’t happen until early next year.
But the Berkshire Hathaway chairman and CEO says the debate over the package of automatic tax increases and spending cuts that’s set to take effect Jan. 1 won’t affect any of his investment decisions.
“The fiscal cliff has nothing to do with long-term investment decisions,” Buffett said on CNBC.
Buffett said he thinks Congress will eventually come up with a fiscal plan that makes sense, even if it doesn’t happen until after the tax increases and spending cuts take effect.
“I think there will be a lot of pressure if they don’t get an agreement by Dec. 31,” Buffett said.
Buffett appeared on CNBC Wednesday with Carol Loomis to discuss her new book about his career, “Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012.” The pair have made several media appearances promoting the book this week.
Buffett also made headlines earlier this week by repeating his call for higher taxes on the ultrarich in an opinion article in The New York Times. Buffett said Wednesday that President Barack Obama told him he liked the article when the two spoke on the phone last Saturday, but the two men didn’t discuss their difference of opinion over whose taxes should increase.
Buffett has said he supports Obama’s proposal to end the Bush tax cuts for the wealthy, but he’d like to set the point where taxes increase at $500,000 income, not the $250,000 point Obama has suggested. He also said Congress should impose a minimum tax of 30 percent on income between $1 million and $10 million, and a 35 percent rate for income above that.
Buffett also seemed to suggest that Congress consider raising corporate taxes. He pointed out that three or four decades ago, American businesses used to pay taxes that equated to roughly 4 percent of the nation’s gross domestic product. He said last year corporate taxes amounted to roughly 1.5 percent of U.S. GDP.
“Corporate taxes have not been a problem for corporate America,” he said.
Buffett also rejected the idea that his own company’s structure as a conglomerate helps it reduce the taxes. He said Berkshire Hathaway and all its subsidiaries pay a normal rate of taxes on profits.
Berkshire Hathaway owns more than 80 companies; including insurance, utility, railroad, furniture, jewelry, manufacturing, restaurant and apparel companies. Berkshire’s insurance and utility businesses typically account for more than half of his company’s net income.