Discussions about Warren Buffett

[erpowers]

It seems that when most people here the name Warren Buffett they think he is one of the good guys. According to most of the news reports written about him he is one of the businessmen that constantly try to encourage other businessmen to do what is best for the economy, the country, and the people. In addition, he always seems to be critical of the corporations and businessmen who either do not pay their taxes or try to get away with not paying their taxes. However, it is possible that some of the stories that are promoted about Warren Buffett are inaccurate.

It is possible that there is a bad side toWarren Buffett that few are willing to talk about. According to David Cay Johntson’s Free Lunch Buffett has benefited from various subsidies. In the chapter entitled Just Say No Johntson claims that Buffett’s GEICO company received $100 million in subsidies in order to build a call center in Buffalo. In a previous chapter Johntson claimed that Buffett benefited from a low or zero interest loan that he has kept for about 30 or more years.

In addition, Johntson, without saying, seems to point out that while Buffett is often seen on television criticizing the businessman and corporations that do not pay their taxes or pay less of the taxes than they are supposed to Buffett himself does not pay all his taxes. In the chapter entitled Paying Twice Johntson claims that Buffett bought a number of utility companies. One company was called Mid American Energy Company. This company only paid “4 percent of its American profits in federal corporate income taxes in 2006... On overseas profits, MidAmerican paid a 21 percent tax.” In addition, Johntson points out that in 2007 MidAmerican deferred $666 million in taxes and will only pay 40 cents on the dollar when the taxes will be paid. According to Johnson only half of the taxes will be paid by 2035. By my calculations if the second half of the taxes are paid at the same rate as the first half, the full $666 million will be paid by 2063. So, should there be more of a discussion of the subsidies Buffett has received for his companies and the tax rate he pays when he is hailed as such a great and good businessman? Should the argument be made that even though Buffett may be good at what he does he may not be that much better than some of the bad businessman?