Now that tax season is upon us, will Warren Buffett pay higher taxes?
Buffett, the chairman and CEO of Omaha-based Berkshire Hathaway Inc., didn't get his wish with recent federal tax law, namely a 30 percent minimum tax on annual incomes between $1 million and $10 million and a 35 percent minimum above that.
But he might get partial easing of his angst over paying the lowest federal tax rate in his office despite having the highest income.
The new tax law raised the income tax rate to 25 percent on gains from the sale of stock for married people who make more than $450,000 a year, from the previous 15 percent.
And the law raised the top tax rate on earnings over $450,000 to 39.6 percent from 35 percent, plus limiting some deductions and applying a new health care tax.
Buffett had bared his 2010 tax return to show that his 17.4 percent rate was the lowest in his office — $62 million in adjusted gross income, $39.8 million in taxable income after deductions and a $6.9 million federal tax payment.
The rate was low because nearly all his income was from dividends and capital gains, taxed at 15 percent. Others in his office averaged 36 percent because they paid the higher rates that apply to ordinary income, plus payroll taxes.
Although Buffett hasn't discussed how much the new law might cost him, it's possible to make an estimate based on the increases that went into effect Jan. 1.
His tax rate for 2013 might have grown by about 5 percentage points, putting him at 22 percent or 23 percent. Based on his 2010 taxable income, a 5 percentage point increase would add about $2 million to Buffett's federal tax bill.
Still big on library
Berkshire Vice Chairman Charlie Munger continues his support for the Henry E. Huntington Library and Art Gallery in San Marino, Calif., recently donating shares of Berkshire stock worth about $1.6 million.
The Southern California library is built on the collections of Henry E. Huntington, a native New Yorker whose uncle was an owner of the Central Pacific Railroad.
He moved to San Francisco to help manage the railroad and later to the Los Angeles area, where he worked on the city's transportation system in the early 20th century and expanded into water, power and land development.
Before he retired to concentrate on collecting art and books, he served on as many as 60 corporate boards nationwide. He married Arabella Duval Huntington, his uncle's widow, who was one of the most influential art collectors of her time.
Besides housing botanical gardens and funding research, the library's treasures include historic manuscripts of Chaucer's “Canterbury Tales,” a Gutenberg Bible on vellum, the “double-elephant folio edition” of “Audubon's Birds of America” and what the library describes as a world-class collection of the early editions of Shakespeare's works.
The Huntingtons are buried on the property in a mausoleum designed by John Russell Pope, who later designed the Jefferson Memorial in Washington, D.C.
More than $200,000 in proceeds from Munger's “Poor Charlie's Almanack” book went to benefit the museum, and he donated about $3 million worth of Berkshire stock a year ago.
LeBron James, star of the National Basketball Association's Miami Heat, recently posted a home video on YouTube of a dinner he had in 2008 with Buffett and Microsoft co-founder Bill Gates at a Las Vegas hotel.
“I like this guy because he shows up with good-looking women,” Buffett jokes as James arrives with his then-girlfriend, Savannah Brinson, and L.A. Clippers star Chris Paul and his wife, according to the BusinessInsider website.
Buffett and James have been friends for years, and Buffett has praised James' business sense. In a video made for the 2007 Berkshire shareholders meeting, Buffett defeated James in a one-on-one basketball match. Really.
In the dinner video, Gates explains how bridge works, and as they leave the hotel, James brags to Paul, “We just had dinner with a few friends of ours, you know. Two guys by the name of Warren Buffett and Bill Gates. A lot of people call him William. Two of the most powerful men in the world, you know.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
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