Billionaire investor Warren Buffett called U.S. Senator Orrin Hatch to gauge Congress’s direction on curbing tax inversions, the senator said Thursday.
Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., is helping finance Burger King Worldwide Inc.’s purchase of Tim Hortons Inc. and its move to Canada. That transaction could be affected by legislative and regulatory changes being considered in Washington.
“He called me and he said you’ve got to do something about tax inversions,” said Hatch of Utah, deviating from his prepared remarks Thursday in a speech at the U.S. Chamber of Commerce in Washington. “I think he wanted to know where we were going and he knows I’ll tell him the truth, which I did.”
U.S. lawmakers are deadlocked on curbing tax inversions and appear to be heading toward leaving Washington for campaign season without acting on the issue. The Treasury Department is studying its administrative options and will make a decision in the “very near future,” Secretary Jacob J. Lew said this week.
Hatch, the top Republican on the Senate Finance Committee, contradicted himself on the date of the Buffett call, at first saying it was last week and then saying it was before the Burger King deal became public on Aug. 26.
“We’re friends,” said Hatch, 80, who is poised to become Finance Committee chairman if Republicans take over the Senate majority. “I think the world of him in many respects. I’ll never understand why he’s a Democrat.”
Buffett, 84, is the third-wealthiest person in the world with a fortune of $67.6 billion as of Wednesday, according to the Bloomberg Billionaires Index. His father, Howard, was a Republican member of Congress.
Buffett, who has been an informal tax policy adviser to President Barack Obama, a Democrat, said in a 2012 Bloomberg documentary that his political views were shaped in part by civil rights issues. He said Democrats were “much more attuned” to that. Buffett didn’t immediately respond to a request for comment sent to an assistant Thursday at Omaha, Nebraska-based Berkshire.
Executives from Miami-based Burger King have said the transaction wasn’t designed to reduce taxes and wouldn’t lower the company’s tax bill significantly.
Because the combined company will have substantial operations in Canada, it probably wouldn’t be affected by a bill that would generally prevent U.S. companies from buying smaller foreign businesses and taking their addresses for tax purposes. The combined company could be hurt by limits proposed by Senator Charles Schumer of New York, who wants to curb inverted companies’ interest deductions.
Hatch, who sharply countered the administration’s criticism of inverting companies as unpatriotic, has set out what he described as a high bar for his support for any stopgap tax law to stem inversions.
Any bill, he said, must be revenue-neutral, apply only prospectively and move the country toward a tax revamp that would mean lighter taxes on U.S. companies’ foreign income.
The current set of Democratic proposals, he said Thursday, don’t meet those tests, which he called nonnegotiable.
“I know I’ve set a pretty high bar for any potential approach to dealing with inversions, and that’s not by accident,” Hatch said.
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