Well, now we know why President Obama hasn’t trotted out his favorite “wise investor” sidekick for Democrats’ latest anti-fat-cat attack — the campaign against the “unpatriotic” tax dodge known as the corporate inversion.
Turns out homespun gazillionaire Warren Buffett wasn’t available for this latest round of election-year class warfare, because he was busy helping plot an inversion himself.
Yes, it seems Saint Warren loves corporate inversions, particularly when they help him and his investment firm Berkshire Hathaway make a pile of money.
Buffett’s company provided a chunk of financing for the latest inversion deal, Burger King’s takeover of Canada-based doughnut maker Tim Hortons.
When it closes, the deal will move BK’s headquarters to Canada, thereby lowering the combined company’s corporate taxes.
Similar inversions — in which a bigger firm buys a smaller one, but officially moves the new HQ to the smaller company’s lower-tax nation — have been driving the president and his economic team bonkers in recent weeks. How dare they escape the “fairness” of our tax collectors?
Which is why it’s so delicious to see Buffett — until now, the ultimate fat-cat spokesman for “tax fairness” — up to his eyeballs in the BK inversion.
What it highlights, of course, is that the biggest problem with the tax code isn’t that it doesn’t tax enough, but that it taxes in the wrong way.
Corporations refuse to “repatriate” their overseas profits — to invest them back here in the United States — because it’s too damn expensive to do so.
Yet the same corporations feast on tax loopholes carved out by their lobbyists and big-government bureaucrats, while smaller US businesses get stuck paying full freight.
Corporate inversions are the rage because our corporate tax rate is much higher than almost any other developed nation’s. The obvious solution would be to rationalize our corporate tax code with the rest of the world to attract businesses here.
But economical rationality isn’t this administration’s goal; it’s too busy redistributing US wealth and working to make us more like Europe — with its high unemployment, massive taxes and unaffordable welfare states.
So, instead, the administration’s been pitching the idea that companies that do inversions should be hit with some penalty. And, of course, it’s been pushing the idea harder as polls increasingly suggest Democrats will lose control of the Senate come Election Day.
The president and Treasury Secretary Jack Lew would’ve loved to trot out Saint Warren to back their pitch.
But the only Buffett comment I’ve found on the issue was a rather meek assessment offered on CNBC: “It does get a little annoying to us when we see other people paying far lower tax rates while engaging in the same sorts of businesses that we engage in.”
Plainly, he’s decided it’s better to be that “other people.”
In fact, for all the love he’s received from the left for his endorsement of higher personal-income- and capital-gains-tax rates, the Oracle of Omaha has always exploited loopholes himself:
Berkshire Hathaway itself prospers by gaming the tax code — including gimmicks not unlike the private-equity dodge that featured in Democrats’ attacks on Mitt Romney.
When news broke of Buffett’s involvement in the Burger King deal, the White House was silent — as you might expect. The dealmakers are also downplaying Buffett’s role, saying that “Berkshire Hathaway has committed $3 billion of preferred equity financing.
Berkshire is simply a financing source and will not have any participation in the management and operation of the business.”
What hasn’t been revealed is how much money Buffett is making on the financing for what his friend in the White House considers an evil tax dodge.
Charles Gasparino is a Fox Business Network senior correspondent.