Buffett says no other American would have had to pay even a cent in federal taxes if this had happened

While I explained why Berkshire Hathaway has been cropped Apple position during the annual shareholders meeting on Saturday, Warren Buffett made a comment that earned a big round of applause from the audience.

The investment guru noted that Berkshire pays taxes at a 21% federal tax rate on the capital gains it earns on its Apple investment. The tax rate was 35% not long ago and a steeper 52% in the past, he said.

“The federal government owns a portion of the revenue of the business we make. They don’t own the assets, but they own a percentage of the revenue and they can change that percentage every year,” he said.

“I would say that with the current fiscal policy, I think something needs to be done,” he said.

The US government has a huge budget deficit and is burdened by a heavy debt burden.

With this in mind, Buffett said higher taxes are very likely.

“They may decide one day that they don’t want the budget deficit to be that big because that has some important consequences, and they may not want to cut spending much,” he said.

Buffett stated that Berkshire pays significant federal income taxes, emphasizing that it is appropriate for a company in a country as generous to entrepreneurs as the United States to meet its tax obligations.

He noted that Berkshire sent more than $5 billion in taxes to the U.S. federal government last year.

“If 800 other companies had done the same, not a single other person in the United States would have had to pay a dime in federal taxes, whether it be income taxes, no Social Security taxes, no estate taxes.”

Read next: Want to save ‘real money’? Buffett has two pieces of advice for consumers with little money

Photo: Shutterstock

Market news and data powered by Benzinga APIs