Buffett to CNBC: Public Partnership Tax Gap "Illogical"
Billionaire investor Warren Buffett tells CNBC that if a partnership and a corporation are essentially run the same way, it "seems illogical" to tax the partnership at a lower rate than the corporation.
In an interview with CNBC's Brian Shactman outside a fundraiser Buffett is attending for Democratic Presidential Candidate Hillary Clinton, he said:
"If you run a partnership and you have capital gains, you have a 15% tax rate and if you run a corporation and have capital gains you have a 35% tax rate. When both entities are operating in a similar manner with many thousands of shareholders, freely tradable shares, people managing them who are attempting to evaluate investments, it seems a bit illogical to have that sort of a spread in the tax rate just depending on form."
The question of whether private equity partnerships that go public should be taxed at the higher corporate tax rate has been raised in the wake of Blackstone's IPO. A bill that would eliminate the gap has been introduced by leaders of the Senate Finance Committee.
Buffett also told Shactman he thinks Hillary Clinton would be good for America and for business as President. But he's still not endorsing her explicitly, saying he doesn't want to "turn his back" on either Clinton or rival Barrack Obama. He says he'd be happy with either of them in the White House. "Odds are good we'll have a Democratic president (in 2008) but it's not a cinch."
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