- President Donald Trump claimed in 2016 that Warren Buffett took advantage of previous business losses to lower his federal income tax.
- The billionaire investor responded that he had paid federal income taxes every year since 1944 and that charitable contributions and state income taxes made up the bulk of his deductions.
- Trump paid just $ 750 in federal income taxes in 201
- The president used losses of $ 916 million to cut his tax payments from 1995 to 2005. He applied for and received a $ 73 million tax refund that is still under IRS scrutiny and deducted expenses like hairstyling as a business expense, the report said.
- You can find more stories on the Business Insider homepage.
Warren Buffett may feel vindicated by the New York Times report this week that found that President Donald Trump paid only $ 750 in federal income taxes in both 2016 and 2017 and paid no income taxes for 10 of the last 15 years.
Trump called Buffett out during a presidential debate with Hillary Clinton in October 2016, claiming the billionaire and CEO of Berkshire Hathaway had brought forward past business losses to cut his federal income tax bill, just as Trump did in the mid-1990s.
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“A lot of their friends made major deductions,” Trump countered when Clinton questioned his use of $ 916 million in net operating losses to reduce his tax burden in the 1990s. “Warren Buffett took a massive print.”
Trump also proclaimed at a rally in Arizona earlier this month that Buffett had reported losses of $ 873 million, adding that he doubted the investor wrote them off instead of bringing them forward.
Buffett responded by posting the details of his 2015 tax return. That year, he paid $ 1.8 million in federal income taxes, which is roughly 16% of his adjusted gross income.
The Berkshire boss also announced deductions of $ 5.5 million, all but $ 36,000 of charitable contributions and state income taxes, he said. He added that his previous tax returns showed a similar pattern.
“I’ve paid federal income tax every year since 1944 when I was 13,” Buffett said. “I have copies of all 72 of my returns and none used a lecture.”
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Meanwhile, Trump paid income taxes of $ 642,000 for the first time in four years in 2015, The Times reported. By 2005, he had exhausted the reported 1995 operating loss of $ 916 million, the newspaper said.
The Times report revealed that Trump remains at odds with the IRS over a $ 73 million tax refund that he requested and received as of 2010. He also highlighted Trump’s story in which he deducted things like hair styling, table linen, and property taxes on a family estate’s business expenses.
The report backed Buffett’s famous criticism of U.S. tax laws and loopholes that allow him to pay a lower tax rate than his secretary. The revelation spurred numerous politicians to propose a “Buffett Rule” that would raise taxes on the ultra-healthy.