Warren Buffett’s personal income taxes, once debated in Congress after he complained they were too low, are back in the political fray.
In response to a comment by Republican presidential candidate Donald Trump, the Omaha financier said Monday he didn’t take a “massive deduction,” as suggested by Trump, and has paid federal income taxes every year since 1944.
Buffett’s federal income tax last year: $1,845,557, despite making $2.85 billion in charitable contributions, he said.
Buffett, a supporter of Democratic candidate Hillary Clinton, sent out a press release giving figures from his 2015 tax return in what he said was a response to Trump’s comment during Sunday’s debate with Clinton.
Asked to respond, Trump’s campaign did not comment specifically on Buffett’s press release but said Trump and the campaign have commented on the income tax issue “multiple times.”
Buffett’s income taxes and charitable contributions also have been the subject of other criticisms by detractors, who have said his annual donations of corporate stock are a means to escape federal taxes on his growing wealth.
Berkshire Hathaway Inc., the business Buffett runs as chairman and chief executive, paid income taxes last year totaling $10.5 billion.
During the debate, Trump was asked about a recent New York Times story that said he reported a $916 million loss in 1995, meaning he likely paid no federal income taxes for as long as 18 years.
“Warren Buffett took a massive deduction,” Trump said during the debate. Trump also said he properly followed tax laws and did not pay federal income taxes for some years.
In Monday’s press release, Buffett said: “He has not seen my income tax returns. But I am happy to give him the facts.”
Buffett said his adjusted gross income on his 2015 federal tax return was $11,563,931. His deductions totaled $5,477,694, which included $3,469,179 in “allowable charitable contributions,” $2,972,478 in state income taxes and $36,037 in other deductions.
He donated $2.85 billion to charities in 2015, nearly all of that to the Bill & Melinda Gates Foundation and to four Buffett family foundations, but almost none of that qualified as a deduction.
“Tax law properly limits charitable deductions,” Buffett said, and he does not carry forward such contributions to be deductions in future tax years. Tax laws generally allow both contributions and losses to be carried forward to future tax years as possible deductions.
He said he has copies of all 72 of his income tax returns, the first one filed in 1944 when he was 13. “Though, being a slow starter, I owed only $7 in tax that year,” he said in the press release.
Trump has declined to make his tax returns public, saying he is being audited and would make the returns public when that is over. IRS officials have said a taxpayer is free to make returns public even if they are under audit.
Last summer Buffett spoke at a campaign rally in Omaha for Clinton, introducing her to the audience and challenging Trump to a joint appearance during which he and Trump both would make their tax returns public and answer questions. That hasn’t happened.
In Monday’s press release, Buffett said his tax returns have been audited “multiple times” and are being audited now by the Internal Revenue Service.
“I have no problem in releasing my tax information while under audit,” Buffett said. “Neither would Mr. Trump — at least he would have no legal problem.”
The bulk of Buffett’s wealth is tied up in Berkshire stock. He received a $100,000 salary last year from Berkshire, an amount that hasn’t changed for years, and $370,244 for personal and home security costs.
The source of the rest of his income isn’t public but likely comes from other investments.
The gain in value of Buffett’s Berkshire stock — about $12 billion this year — isn’t counted as income because he hasn’t sold any of the stock. He donates shares of Berkshire stock to the foundations each year, which means he doesn’t pay income taxes on the gain in value of those shares.
But Buffett owns about 18.7 percent of Berkshire, which means he indirectly accounted for about $2 billion of Berkshire’s $10.5 billion in 2015 income taxes.
Buffett, 86, has said that when he dies, 99 percent of his wealth will go to charitable foundations, a transfer that also would exempt the gain in value of the Berkshire shares from income taxes.
The Federal Election Commission reported that Buffett contributed $2,700 to Hillary Clinton’s campaign in 2015 and a total of $150,200 to Democratic campaign organizations in 2015 and 2016, plus $2,700 each to Rep. Brad Ashford of Nebraska and Sen. Ronald Wyden of Oregon, both Democrats.
Buffett’s earlier foray into tax policy came early in President Barack Obama’s administration, when he pointed out that his office staff (including his assistant) pays higher income tax rates than he does and that Congress should set a minimum tax rate for high-income people such as himself.
Discussion of instituting a “Buffett tax” has continued since then.
Berkshire Hathaway Inc. owns the Omaha World-Herald.
Correction: A previous version of this article incorrectly stated Warren Buffett's ownership share of Berkshire Hathaway and how much of its income taxes he indirectly accounted for in 2015. Buffett owns 18.7 percent of Berkshire and indirectly accounted for about $2 billion of Berkshire’s $10.5 billion in 2015 income taxes.