Buffett Watch

US senator says Warren Buffett called him about tax inversions


U.S. Senator Orrin Hatch, the top Republican on the tax-writing Finance Committee, said billionaire investor Warren Buffett called him recently to find out what Congress might do about companies that move abroad for tax purposes.

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Lawmakers, particularly Democrats, are concerned about inversions, in which a U.S. company buys a foreign competitor and makes its home country the new tax domicile. The deals often result in lower tax rates for the inverted company.

Warren Buffett
Chris Goodney | Bloomberg | Getty Images

Buffett, who has sided with President Barack Obama's Democrats on many tax issues, was criticized by some Democrats when he agreed to put up some cash for Burger King Worldwide's $11.5 billion deal to buy Canadian chain Tim Hortons.

Democrats slammed the deal after Burger King said it would be taxed as a Canadian company. Buffett defended his role and said the move was not really about taxes.

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Hatch said during a speech at the U.S. Chamber of Commerce on Thursday that, before that fuss erupted, Buffett had wanted to know what lawmakers might propose on inversions.

"He called me to say, 'You've got to do something about tax inversions," the Utah senator said. "I believe that was before he entered into the Burger King situation."

Democrats have proposed numerous ways to make inversions more difficult or less financially lucrative for companies. Hatch said on Thursday that many of those ideas were driven by politics.

He and Senator Ron Wyden, the top lawmakers on the Senate Finance Committee, say they are working on their own inversion plan but have not given details of what they are considering.

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Hatch said Buffett, who he called a friend, has said in the past that responsible businesses try to reduce their tax bills and sometimes make transactions that are driven by taxes.

"I don't blame him," Hatch said. "I don't like it, but he's living within the law."

By Reuters