Adding to the mountains upon mountains of evidence that the American economy is thoroughly rigged in favor of the wealthy, Berkshire Hathaway CEO Warren Buffett told investors in a letter (pdf) over the weekend that his company saw a $29 billion boost in net worth that it didn't even earn—all thanks to the GOP tax cuts Buffett fervently lobbied against and said he didn't want.
"So a single financial firm received a one-year tax windfall that's more than the federal government allocates to its largest student aid program (Pell Grants) for the entire nation."
—David Sirota
"Berkshire's gain in net worth during 2017 was $65.3 billion," Buffett observed. "A large portion of our gain did not come from anything we accomplished at Berkshire...only $36 billion came from Berkshire's operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. tax code."
In response to Buffett's letter—which further demonstrated that, in the U.S., the wealthy get wealthier by default while pay for most Americans remains stagnant, even as they work longer hours—commentators pointed out the fact that $29 billion is equal to or more than what the U.S. spends on crucial social programs and government agencies.
So a single financial firm received a one-year tax windfall that’s more than the federal government allocates to its largest student aid program (Pell Grants) for the entire nation https://t.co/EqLomIkpsJ https://t.co/u5IrBxqD8f
— David Sirota (@davidsirota) February 25, 2018
Thanks to the #TrumpTax, Warren Buffett's investment company got a $29 billion tax cut.
To put that enormous windfall in perspective, $29 billion is roughly 2.5x the entire annual budget for the Centers for Disease Control.
— Michael Linden (@MichaelSLinden) February 25, 2018
“We can’t afford single payer” https://t.co/SSYXjNawvQ
— Ken Klippenstein (@kenklippenstein) February 25, 2018
Highlighting the fact that Berkshire's net worth boost came because its "deferred tax liabilities now pay off at the 21 percent instead of the 35 percent rate," journalist David Dayen notes that $29 billion is "the equivalent of what the U.S. spends on Section 8 vouchers in a year."
2/ Berkshire got $29 billion added to their book value because their deferred tax liabilities now pay off at the 21% instead of the 35% rate.
— David Dayen Pass-Through Vehicle LLC (@ddayen) February 26, 2018
3/ In other words, Warren Buffett, the glorious, philanthropic investor known for wanting to raise taxes on the rich, used the mother of all tax dodges to save his company the equivalent of what the U.S. spends on Section 8 vouchers in a year.
— David Dayen Pass-Through Vehicle LLC (@ddayen) February 26, 2018
But while the Republican tax plan is certainly making the economy even more rigged, the earnings of the wealthiest Americans in 2017—and, for that matter, every year since the 1960s—show that the balance was heavily tilted in their favor long before the GOP bill was even conceived. Buffett himself famously admitted that "there's been class warfare going on for the last 20 years, and my class has won."
"U.S. wealth increased by $8.5 trillion in 2017, with the richest 2 percent getting about $1.15 trillion, which is more than the total cost of Medicaid (federal AND state) and the complete safety net, both mandatory and discretionary, including the low-income programs that make up the social support package derisively referred to as 'welfare,'" notes author Paul Buchheit in a piece for Common Dreams on Monday.
"How was their money made? Almost entirely by passively waiting for the stock market to go up," Buchheit writes. "American inequality is extreme, shameful, perverse, and growing....Yet by some unfathomable measure of ignorance or malice, Republicans cheer on the millionaire-making stock market while telling the most vulnerable Americans that they're spending too much on food."
