As the defense wraps up its case in former President Donald Trump’s ongoing fraud trial, a past tax dispute between Trump and renowned investor Warren Buffett has resurfaced, highlighting the complexities of tax laws and the conduct of high-profile people in finance and politics.
During a critical presidential debate in 2016, Trump, then the Republican candidate, made a bold accusation involving his Democratic rival Hilary Clinton and implicating Buffett in the process. He asserted,
“Many of her friends took bigger deductions,” Trump said. “Warren Buffett took a massive deduction.”
This claim was part of his response to criticism regarding his $916 million loss declared in 1995, which, as reported, might have allowed him to evade federal income taxes for several years.
In response, Buffett refuted Trump’s allegations with precise details of his tax records. Buffett revealed his 2015 tax information, reporting an adjusted gross income of $11.6 million and deductions of $5.5 million, primarily from charitable contributions and state income taxes.
“I have copies of all 72 of my returns, and none uses a carry forward,” Buffett said, challenging Trump’s insinuation of similar tax avoidance strategies. Buffett also highlighted that he had been paying federal income tax every year since he was 13 years old.
Central to this dispute was Trump’s reluctance to release his tax returns, citing ongoing audits. This lack of transparency had been a point of contention during his candidacy. Buffett, who had been vocal in urging Trump to disclose his tax information, pointed out that there was no legal impediment to releasing tax information while under audit.
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The clash between these two prominent figures garnered extensive media attention and public interest at the time. Trump’s allegations and Buffett’s responses brought to light their tax practices and sparked broader discussions on tax regulations, financial transparency and the accountability of public figures.
Although Buffett pays taxes and has publicly shared the details about them, reports suggest that his effective tax rate may be relatively low, a common scenario among some of the wealthiest people. In an investigative piece, ProPublica highlighted that billionaires often use tax-avoidance strategies not typically available to those with conventional wage income. Their wealth, which largely stems from appreciating assets like stocks and real estate, isn’t taxed unless those assets are sold.
Specifically, ProPublica’s analysis indicated that Buffett’s “true tax rate” was about 0.1%, calculated by considering the taxes he paid relative to his wealth growth over five years. During this time, his wealth reportedly increased by $24.3 billion, while he paid $23.7 million in taxes against a reported taxable income of $125 million. This discrepancy arises because the current tax system primarily taxes income, not wealth or unrealized capital gains.
ProPublica obtained this tax information through undisclosed means and stated that it thoroughly verified its accuracy. The details have not been independently verified.
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This article Trump Once Accused Warren Buffett Of Tax Evasion, Despite His Own Refusal To Release Tax Returns — Buffett Fires Back: ‘I Have Copies Of All 72 Of My Returns’ originally appeared on Benzinga.com
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