Warren Buffett’s Berkshire Hathaway halved its stake in Apple in the second quarter, a selloff that could cost the Omaha-based conglomerate some $15 billion – or more revenue than Coca-Cola generates in a year.
The average price of Apple stock that Berkshire cashed in on in the second quarter was about $186 apiece. That puts it at a gain of a little more than $150 per share, or about $59 billion, according to estimates by Barron’s. Given this sum, and federal and state income taxes of 25%, that could come out to $15 billion in tax payments this year.
For reference, Coca-Cola made $14.3 billion from the second quarter of 2023 to the first quarter of 2024. Berkshire owns 400 million shares of Coca-Cola, or roughly 9.3% of the company.
Buffett has remained steadfast in his commitment to Apple’s stock, despite reducing Berkshire’s holdings.
“Unless something really extraordinary happens, we will own Apple, and American Express, and Coca-Cola when Greg takes over this place,” Buffett said during a question-and-answer session at the annual Berkshire shareholder conference in May, referring to Greg Abel, his handpicked successor.
MacDailyNews Take: For some perspective, as depressingly awful as it is, the U.S. National Debt stands at $35.155 trillion and counting, so Berkshire’s gigantic $15 billion tax payment would reduce the U.S. National Debt to $35.140 trillion.
In other words, when you do the math, raising taxes, even doubling, tripling, quadrupling, etc. taxes on corporations will do nothing for the U.S. debt, but drive companies to park cash offshore, cause layoffs, and raise prices on consumers since that’s who ultimately pays corporate taxes anyway. And anybody who tells you differently is lying, incapable of doing basic math, and/or lacks critical thinking skills.
Despite the selloff, Apple remains Berkshire’s biggest stock investment as it continues to hold $84.2 billion in AAPL stock.
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I think MDN must lack some basic thinking skills, since it seems to think Berkshire Hathaway is the only corporation paying taxes (and in their calculation their taxes seem to be limited to one single sale of AAPL stock) – that’s the only way it would make sense to claim that no matter how high you raise corporate taxes, it won’t put a dent in the federal debt.
There are roughly 2 million C corporations in the US (and a whole bunch more S corps). The flat federal tax rate they have to pay is only 21% – and the effective tax rate is often much lower. In the case of AAPL, it’s been 14.7% in 2023. So doubling their taxes should not be seen as so outrageous – it would barely bring them even with individuals’ taxes (in the highest tax bracket). And if you multiple doubled taxes by 2 million corporations, I’m sure you’d see more of a dent in the federal debt than MDN paints.
As per critical thinking, which part(s) of the following didn’t you understand?
[Raising corporate taxes will] drive companies to park cash offshore, cause layoffs, and raise prices on consumers since that’s who ultimately pays corporate taxes anyway.
Which part(s)?
Those who strive to tax corporations only end up taxing themselves. – MacDailyNews, March 4, 2015
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
It is naive to assume that increasing taxes would/should be done in a vacuum. If there was enough of a majority in Congress to increase corporate tax rates, there’d certainly be enough of a majority to also enact laws that prevent repatriation and/or laws to close the endless loopholes corporations use to make the effective tax rate so much lower than the real tax rate.
You don’t get it do you. There is no rate at which there will be enough taxes to reduce our national debt because spending would be 110% or greater than any amount collected.
There was a chance to address this in the Simpson Bowles Act of 2010, a bi-partisan commission, that would have preventing spending more than we take in at one end, and gradually reduce the deficit at the other over a long period of time. The idea was to reduce the debt as a percentage of GDP down to about 30% by 2040. It’s north of 110% today and the debt was 13 trillion in 2010, now over 34 trillion.
But right, lets just raise taxes some more, that will fix it, right Einstein?
Revenue from corporate income tax in the United States of America amounted to 420 billion U.S. dollars in 2023.
The U.S. National Debt stands at $35.155 trillion. Put all of that $420 billion straight into paying off the debt (that’s not what actually happens, ever, by the way), but, if you did, the U.S. National Debt would still stand at $34.735 trillion. Double corporate taxes, which would certainly “drive companies to park cash offshore, cause layoffs, and raise prices on consumers since that’s who ultimately pays corporate taxes anyway,” and pay it straight into servicing the debt and the U.S. National Debt would still be $34.315 trillion.
In 2024, interest payments on the U.S. National Debt will total $892 billion (that’s $52 billion more than if you doubled corporate taxes which, again, would “drive companies to park cash offshore, cause layoffs, and raise prices on consumers since that’s who ultimately pays corporate taxes anyway”). Interest payments on the U.S. National Debt will pass $1 trillion in 2025.
Do you get it, yet?
You cannot tax your way out of runaway Democrat spending on wasteful programs and a massive government bureaucracy. Period.
Anyone who tells you they can tax their way out of this disaster, that “the rich need to pay their fair share” is, exactly as MDN wrote, “lying, incapable of doing basic math, and/or lacks critical thinking skills.”
“We don’t have deficits because people are taxed too little. We have deficits because big government spends too much.” – Ronald Reagan, January 27, 1987
“We don’t have deficits because people are taxed too little. We have deficits because big government spends too much.” – Ronald Reagan, January 27, 1987
AMEN! All you need to know, and NO, @Thomas Wolf does not get it…
TW: you seem to know what’s the proper tax rate…
“The flat federal tax rate they have to pay is only 21%”
“So doubling their taxes should “not be seen as so outrageous”
The liberal mind seems to have an uncanny “ability” to make such a determination, while simultaneously not factoring in the savings/spending part of the equation.
Perhaps you like the sound of “From each according to his ability and to each according to their need?”
Have a retort to the Reagan quote below?
In the liberal/progressive mind, everything and everyone belong to the government. So there are no limits on government. Neither with regard to taxes nor regulations on behavior.
You’d make a perfect Commissar of Taxation in a Harris administration.
But, I thought the rich never pay their fair share!
(for any with low reading skills, this comment is 100% snarky sarcasm)
Like the question above, “what’s fair?” Btw, “fair” for some ALWAYS means less fair/unfair for another. The “ability” that one has to feel the rights to another’s wallet never ceases to amaze.
Fair taxation would involve a balanced budget so that future generations don’t have to pay off the debts of their ancestors with interest piled on top.
Thanks for nothing to both drunken idiot parties that don’t have the basic math skills to pay for what they take.