Billionaire businessman Warren Buffett said his Berkshire Hathaway, Inc. posted a massive $65 billion profit last year, almost half of which came thanks to President Donald Trump’s tax overhaul, which heavily favored rich corporate giants over middle class taxpayers.
Buffett said in his annual letter to company shareholders Saturday that Berkshire’s value rose 23% in 2017, its best showing in some two decades.
But the folksy businessman — known for advocating progressive, worker-friendly tax policies, despite his own standing as one of the world’s richest men — acknowledged that a huge amount of the unexpectedly large profits came thanks to Trump’s tax reform bill passed by Congress in December.
That legislation, championed by Congressional Republicans but staunchly opposed by Democrats, slashed tax rates for corporations from 35% to 21%.
“The $65 billion gain is… real – rest assured of that. But only $36 billion came from Berkshire’s operations,” Buffett wrote in his message.
“The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code,” the Berkshire Hathaway chairman and CEO said.
Buffett, an outspoken critic of Trump’s tax reform bill, opposed massive cuts for businesses as unwarranted giveaways to the wealthy.
The Berkshire Hathaway CEO for years championed higher taxes for the well-to-do, who in his view should not pay at a lower rate than the middle class — a principle that came to be known as the “Buffett rule.”
A few years back, Buffett advocated for a massive tax code overhaul, famously decrying the inflated tax rate paid by his secretary — a rate considerably higher than his own — as grossly inequitable.
Under a fairer system, Buffett said, he would have paid eight or nine percentage more taxes — and even then would still have been taxed at a rate lower than many of his workers.
The rewrite of the tax system finally came last year under Trump, but instead of providing substantial relief for average middle-class earners, it widened inequities in the tax breaks afforded rich and poor.
Trump’s controversial bill is seen as a likely major campaign issue in the 2018 midterm elections, as Democrats hope to regain control of the Republican controlled legislature.