Warren Buffett responded Monday to Donald Trump’s suggestion during Sunday night’s presidential debate that he had avoided taxes by using tax deductions, saying that he has paid federal income taxes every year and criticizing Trump’s excuse for holding back his tax returns.
“I have paid federal income tax every year since 1944, when I was 13. (Though, being a slow starter, I owed only $7 in tax that year),” the Omaha, Neb., billionaire investor and Hillary Clinton backer said in a statement provided to the Washington Examiner. “I have copies of all 72 of my returns and none uses a carryforward.”
Buffett’s statement was a response to comments made by Trump in the presidential debate suggesting that he and Buffett have similar tax situations. Although Trump’s taxes are largely a mystery to voters because he has not released his tax returns, the New York Times obtained leaked copies of his 1995 state tax returns that showed him declaring a $916 million loss, which experts speculated may have allowed Trump to avoid 18 years of income taxes by carrying those losses forward.
In explaining that loss and the possibility that it resulted in him not paying income taxes for years, Trump said “many of [Clinton’s] friends took bigger deductions — Warren Buffett took a massive deduction.”
A deduction is separate from a loss carryforward. Buffett detailed his deductions for 2015: Total deductions were $5,477,694, including allowable charitable deductions of $3,469,179.
He noted that those charitable deductions paled in comparison to the $2.86 billion in total he donated to charity in 2015. “Tax law properly limits charitable deductions,” he explained.
Buffett also took a dig at Trump for claiming that IRS audits have prevented him from making his returns public, as is customary for presidential candidates.
“Finally, I have been audited by the IRS multiple times and am currently being audited. I have no problem in releasing my tax information while under audit,” Buffett wrote. “Neither would Mr. Trump – at least he would have no legal problem.”
Buffett has long been an advocate of raising taxes on high-income individuals. A key plank of Hillary Clinton’s tax plan is what she calls the “Buffett rule,” a 30 percent minimum tax on incomes over $1 million. The rule is so named because of Buffett’s observation that he has paid a lower tax rate than his secretary.
