Warren Buffett Responds to Donald Trump
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At the second presidential debate on Sunday, Republican presidential nominee Donald Trump effectively admitted that he's used tax loopholes to avoid paying federal income taxes for an unspecified number of years. To defend his "smart" tax strategy, Trump tried to throw investor and philanthropist Warren Buffett under the bus. And it didn't go well.
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Moderator and CNN host Anderson Cooper asked Trump pointblank whether he used the $916 million in losses he claimed in 1995 to put off paying federal income taxes. Trump answered in the affirmative and continued, "So did Warren Buffett, and so did George Soros, and so did many of the other people that Hillary is getting money from."
Buffett, a supporter of Democratic presidential nominee Hillary Clinton, responded in a statement on Monday. Here's part of that statement:
"My federal income tax for [2015] was $1,845,557. Returns for previous years are of a similar nature in respect to contributions, deductions and tax rates. 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.) I have copies of all 72 of my returns and none uses a carryforward.
The term "carryforward" refers to a process by which certain wealthy individuals can claim losses (from real estate devaluation, for example) for tax purposes. If those losses exceed a person's adjusted income, then the current tax code enables them to pay nothing. In Trump's case, the enormous loss he reported in 1995 "could have allowed him to legally avoid paying any federal income taxes for up to 18 years," The New York Times reported after being sent what appears to be three pages of Trump's 1995 tax returns.
Buffett took a couple extra jabs at Trump in his statement. Buffett emphasized his charitable giving and noted that, like Trump, his taxes are also under audit by the Internal Revenue Service, which Trump has cited as an excuse for withholding his full tax returns. (That's not a valid excuse, according to the IRS.)
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Trump has made much of his wealth and charitable giving throughout his campaign. Some speculate that he refuses to release his tax returns because he's worried that the documents would expose him as less wealthy or philanthropic than he's insisted. We already know, based on investigative reports by The Washington Post, that Trump has relied exclusively on contributions from outside donors to fund his private foundation, The Donald J. Trump Foundation, since 2008.
