Warren Buffett Praises The GOP Tax Bill

Warren Buffett Praises The GOP Tax Bill

The news cycle may have moved on, but the GOP tax bill continues to make waves across the economic landscape. Immediately after it was signed last December, numerous companies came out of the woodwork to announce pay bonuses, raises, and increases in charitable spending. That trend has continued up to this day. Walmart—the great boogeyman of retail—recently announced wage increases and bonuses, thanks to the bill.

Four out of five Americans will see their taxes go down, thanks to the tax bill. The vast majority of Americans should be celebrating such an achievement—unless you don’t like keeping your money. Still, Democrats attack the legislation.

Nancy Pelosi, among others, called it Armageddon. Yeah, I guess letting Americans keep more of their money is tantamount to the end of the world. She later insulted $1000 bonuses as “crumbs.” Geez, this woman really understands regular people, doesn’t she?

Even today, Democrats are desperate to convince you that lower taxes are a bad thing. The mental gymnastics required to believe such an idea are incredible. Why would a regular American be upset about keeping more of their money? The only people that could possibly oppose such an idea are those that might lose money. Like bloated government bureaucrats who needed that cash. Boohoo.

You might expect one of the most outspoken liberals—and Democratic donors—to oppose the tax bill. Especially someone who openly and cheerfully endorsed Donald Trump’s rival. But it turns out billionaire investor Warren Buffett had some nice things to say about the GOP achievement. Imagine that, a liberal—in 2018—who was being honest.

Investor Warren Buffett said in an interview on Monday that businesses will benefit from the Republican-backed tax-reform plan.

The billionaire Democratic donor told CNBC that the tax plan, which President Trump signed into law in December, gives U.S. businesses a "huge tailwind."

The law slashed the corporate tax rate from 35 percent to 21 percent.

"It certainly means corporations will pay quite a bit less in tax than they otherwise would," Buffett said. "When we make money in 2018 domestically, and subject to a lot of little things here and there, basically we'll be paying at 21 percent instead of 35 percent. That's a lot of money."

Buffett has opposed lowering taxes in the past, but said in October that he hoped the corporate tax rate would be lowered. (The Hill)

Buffett didn’t become a billionaire—and one of the most sought-after investors—for playing partisan politics. He may support liberal policies and agendas, but he’s not stupid. He’s a businessman, first and foremost. If there is a bill that lowers the corporate tax rate, he’s going to support it.

But shouldn’t Buffett stick to his liberal guns? Shouldn’t he continue in lockstep with the rest of his party? After all, this was one of President Trump’s biggest achievements. Just on principle Buffet should be attacking it. That’s what the left has taught us these days. It doesn’t matter what a person accomplishes; all that matters is if they’re a liberal.

Trump could end all wars and usher in world peace—and liberals would still hate him. He could end poverty, raise the standard of living to new heights, and eradicate cancer. Leftists would still call for his impeachment.

It seems like Buffett hasn’t gone off the deep end with the rest of the left. He knows one important virtue, one that trumps all others: a rising tide lifts all the ships.

A lower corporate tax rate means companies—big and small—will have more cash to work with. Much more cash. That means investments to expand their businesses. Companies will have more opportunity to hire more staff, open more stores, build, create, and innovate. You know what that means? The value of these companies will rise. Meaning big gains, if you invest in their stock.

Someone as incisive and keen as Buffet knows this means good things for investors. A smart investor has already sunk cash into companies—even as the tax bill was being debated. Once passed, it was probably already too late. Companies hit the ground running with investments and bonuses. Their value would only rise—meaning someone who gobbles up stocks is set to do very well.

Corporations such as Starbucks, Home Depot, and Disney have announced employee bonuses, wage increases and better benefits as a result of the tax plan…

Buffett said last week that the tax law has made his company billions of dollars.

“Berkshire’s gain in net worth during 2017 was $65.3 billion, which increased the per-share book value of both our Class A and Class B stock by 23 percent,” Buffett wrote in a letter to Berkshire Hathaway shareholders that accompanied the company’s annual report.

He said much of that gain was due to the tax-reform bill. (The Hill)

The only thing legitimate critics of the tax bill can say is that it might help the rich more than the poor. Sadly, that’s true of most things. The haves are always in a better position than the have-nots. Does that mean we shouldn’t try? And in truth, we are seeing both working Americans and business owners benefitting from the cuts.

Liberals claim that if you cut taxes on the wealthy, they will only horde it. They wanted you to think that business owners were as greedy and corrupt as they are. Democrats have exposed their obvious ignorance of how business works. The more money a company has, the greater opportunity to expand. Companies aren’t interested in sitting on their cash. They want to use it to grow. So, if they have more cash, say from a tax cut, that’s more money for them to expand the economy.

See the correlation liberals? Probably not.

The incredible impact of the tax bill has resulted in companies earning profits, just from lowered taxes.

“A large portion of our gain did not come from anything we accomplished at Berkshire. The $65 billion gain is nonetheless real — rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code,” Buffett wrote. (The Hill)

How bad was the tax rate that a simple cut resulted in such massive gains? That shows you how bad the corporate rate was. Companies were fleeing the country, to places with lower rates. A nation like Ireland only has a 12% corporate rate. If things didn’t change here in the U.S., many businesses would have been looking to greener shores. It was only a matter of time.

Now companies are looking to invest in the United States. Growth is happening at unexpected rates. Millions of Americans are enjoying more of their own cash—which they are putting back into the economy.

Buffett understands this and is making the most of the opportunity. And he’s not shy about admitting it.

If only the rest of his party were honest enough to say that.