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Tags: warren buffett | trump | gop | tax | berkshire

Buffett Thinks Trump, GOP Will Pass Tax Cut This Year


By    |   Tuesday, 03 October 2017 09:47 AM EDT

Investing icon Warren Buffett told CNBC on Tuesday that his Berkshire Hathaway empire is holding off on selling any stocks to see how the tax reform situation plays out in Washington.

Buffett told CNBC on Tuesday that the odds of getting a tax plan passed are higher than what most people expect, but expressed uncertainty over the reforms.

"We may or may not have a change in the tax code," Buffett, the chairman and CEO of Berkshire Hathaway, told CNBC.

Investors are also watching out for progress on President Donald Trump’s tax reform plan, which calls for lowering corporate tax to 20 percent, Reuters reported.

Trump and Republican leaders announced their long-awaited tax plan in September. The framework proposes cutting the top individual rate to 35 percent -- but leaves it up to Congress to decide whether to create a higher bracket for those at the peak of the income scale, Bloomberg reported.

The rate on corporations would be reduced to 20 percent from the current 35 percent, and businesses would be allowed to immediately write off their capital spending for at least five years. Pass-through businesses would have their tax rate capped at 25 percent.

"Right now we're sitting and watching because within three months, actually less than that, we'll know the answer on it," he added.

"I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million," Buffett said.

Meanwhile, U.S. Senator Rand Paul, a conservative maverick who helped kill the latest Republican effort to overturn Obamacare, took issue with Trump’s tax plan on Monday, asking in a tweet if it was really Republican.

“This is a GOP tax plan? Possibly 30 percent of middle class gets a tax hike? I hope the final details are better than this,” the Kentucky Republican said in a statement on Twitter.

He cited the results of a recent analysis by the nonpartisan Tax Policy Center think tank.

Paul’s message could signal difficulties for tax reform in the Senate, where Republicans hold only a 52-48 majority over Democrats and have failed this year to overturn the 2010 Affordable Care Act, popularly known as Obamacare, Reuters reported.

Last week, Republican Senator Bob Corker told reporters he would not vote for tax legislation if it raises the deficit.

Trump and top Republicans in Congress say the tax plan they released last week will deliver a big tax cut to middle-class families and to businesses, and simplify the law by doing away with myriad deductions, loopholes and tax breaks.

But the Tax Policy Center found that many upper middle-income professionals and business people would see their tax bills go up from the loss of deductions.

Trump economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin have also acknowledged that some people could see a tax hike.

However, other respected economic minds fully tout the benefits of Trump's tax plan.

Newsmax Finance Insider Stephen Moore contends Trump's reduction in the corporate tax rate will spur economic growth.

"Donald Trump's latest tax-cut plan would be a steroid injection for the U.S. economy. Bravo to the White House and congressional leaders for packaging the biggest pro-growth tax cut since Ronald Reagan," Moore wrote.

"My only quibble is that I wish the "Gang of Six" negotiators had stuck with President Trump's call for a 15 percent business tax rate — which was in the campaign plan that Larry Kudlow and I helped draft. Instead, this plan would set the rate at 20 percent for corporations (down from 35 percent) and 25 percent for small businesses (down from 40 percent for many firms)," Moore said.

"This may not be as low as Trump wanted, but it is still a vast improvement for competitiveness over the current IRS code."

(Newsmax wires services contributed to this report).

© 2023 Newsmax Finance. All rights reserved.

Investing icon Warren Buffett told CNBC on Tuesday that his Berkshire Hathaway empire is holding off on selling to see how the tax reform situation plays out in Washington.
warren buffett, trump, gop, tax, berkshire
Tuesday, 03 October 2017 09:47 AM
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