Posts Tagged ‘Berkshire Hathaway’

Penny Pritzker: A Chicago Fat Cat for Commerce Secretary?

by Michelle Malkin on Wednesday, March 20th, 2013

This is article 95 of 117 in the topic Obama Appointments

Penny Pritzker: A Chicago Fat Cat for Commerce Secretary?
by Michelle Malkin
Creators Syndicate
Copyright 2013

Will President Obama really nominate billionaire Chicago gal pal Penny Pritzker to head his Commerce Department? “It’s a done deal,” according to a White House source close to the Chicago Sun Times. As further confirmation, Pritzker resigned abruptly from the Windy City’s school board late last week. The crony fix seems to be in.

Taxpayers, beware. Pritzker is a deep-pocketed doyenne with a family history of dodging taxes — or siphoning them away from the public for her own family’s gargantuan private gain. If you want to see how she’ll oversee a $10 billion government agency, look at her own wealth redistribution record.

Most notoriously, Pritzker headed up subprime lender Superior Bank. Even after it went under in 2001 and left 1,400 mostly poor and minority customers destitute, Pritzker was pushing to expand its toxic subprime loan business. As I’ve reported previously, Pritzker and her family escaped accountability by forking over a discounted $460 million settlement over 15 years after the bank collapsed.

One of the Obamas’ oldest Chicago friends and an intimate confidante of Chicago Mayor Rahm Emanuel, Pritzker served as a top national finance chairwoman and bundler for the 2008 presidential campaign. She is an heir to the Hyatt Hotel and Pritzker family fortunes. According to Forbes, her grandfather and his sons also created the industrial conglomerate Marmon Holdings, which the family sold to Warren Buffett’s Berkshire Hathaway for $4.5 billion.

To protect her family’s multibillion-dollar fortune, Pritzker’s enterprises park their money in the very same kind of offshore trusts Obama attacked GOP rival Mitt Romney over. But Obama lapped up nearly $800 million in campaign and inaugural funding raised by Pritzker. A former Pritzker tax lawyer pioneered tax-avoidance strategies for the family, which allowed them to pay $9 million in taxes instead of $150 million in estate taxes after patriarch A.N. Pritzker died. As Forbes notes: “There are now 11 Pritzkers on the Forbes list of the 400 richest Americans.” Nice lawyering if you can get it.

Exempted from Obama’s poisonous class-warfare demagoguery, Pritzker also chaired Chicago’s failed Olympic Village Subcommittee while serving as president of Pritzker Realty Group, a top Illinois mega-developer that would have reaped untold millions in project work if then Chicago Mayor Richard M. Daley and the White House had secured the 2016 Olympic bid.

Former Pritzker executive and Obama campaign treasurer Martin Nesbitt also served on the Olympic committee, while holding the chairmanship of the Chicago Housing Authority under Daley — brother of former Obama Chief of Staff William Daley. Cronies of a feather.

One of the most lucrative schemes milked by these developers and perfected in Chicago is a mechanism called tax increment financing. When I worked in Seattle covering corporate welfare and city government, I became strange bedfellows with a diverse alliance of libertarians and Ralph Naderites who rightly oppose “public-private partnership” deals between developers, statist Democrats and corporate welfare Republican politicians. These “public-private partnership” scams inevitably involve tax increment financing gimmickry to siphon off tax dollars to subsidize developers/builders/contractors, who then reward politicians with big campaign donations.

TIF schemes totaling hundreds of millions of tax dollars were at the heart of the Obama/Daley/Pritzker Chicago Olympics bid. And a huge franchise of Pritzker’s Hyatt Hotels Corp.

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Warren Buffett and the Corrupting of the American Soul

by Austin Hill on Saturday, December 1st, 2012

This is article 191 of 307 in the topic Taxation/IRS

“Bottom line…would raising taxes on the wealthiest Americans have a chilling effect on hiring?”

It was Matt Lauer’s final interview question for his guest, on last Tuesday’s episode of NBC-TV’s “Today” show.

“No,” the guest adamantly replied. “No… and I think it would have a great effect in terms of the morale of the middle class..”

The guest was famed investor Warren Buffett, CEO of the Berkshire Hathaway holding company and a personal friend of President Obama (and by the way, did you know that Obama calls him, and not the other way around? Mr. Buffett would want you to know). He was spouting the usual “it’s time to raise taxes on us rich folks” rhetoric for which he’s become famous.

But Buffett’s closing comments were a bit different this time. Higher taxes on the rich will provide a “morale boost” for those of us in the middle class? How is that so? Why would I, a mere middle class guy, be made to feel better simply because my government is confiscating greater portions of somebody else’s money?

Buffett’s remarks during the NBC TV interview, while in-step with prevailing political sensibilities, were nonetheless mostly illogical. Earlier in the interview Lauer brought up a recent quote from Honeywell CEO David Cote who had noted on another national TV program that he (Cote), and others like him, were feeling a lack of confidence in the political process, so much so that the uncertainty was making them keep their money on the sidelines and preventing them from making additional investments and hiring new workers.

“Well,” Buffett responded, “At Berkshire Hathaway, we’re investing 9 billion in plant equipment, that’s a record, breaking last year’s record.” That was an interesting response, and it was certainly a nice “plug” Mr. Buffett offered for his own company.

It was also a very artful “dodge” from the facts, and rather irrelevant to the discussion. Cote has articulated some grave concerns about a lack of leadership at the White House, and in Congress, and has noted how this lack of leadership has created serious, stifling uncertainty in the business market. So has Cisco CEO John Chambers, Wynn Resorts CEO Steve Wynn, and Intel CEO Paul Otellini (who, ironically, serves on President Obama’s Council on Jobs and Competitiveness). Buffett would prefer to ignore this (it’s always uncertain” he told Matt Lauer).

Buffett also reiterated in the interview that people like him have not been paying their “fair share” of taxes for all these many years. This is where his illogic hits a crescendo. If Mr. Buffett (or anybody else) isn’t paying enough in taxes, then he’s only got himself to blame. He could easily choose to make an extra contribution to the I.R.S. He could also instruct his staff of lawyers and accountants who represent him to the I.R.S., to stop calculating all the legal, allowable tax deductions that are available to him. All of these methods, and others, would allow Mr. Buffett to pay more in taxes – if that’s really what he wants.

But then Buffett had to go and perpetuate the same myth that he and the President have been perpetuating for over two years, when he alleged (once again) that his secretary pays more in taxes than he does.

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Buffett: Tax increases on the rich would be a morale booster for the middle class

by Doug Powers on Thursday, November 29th, 2012

This is article 187 of 307 in the topic Taxation/IRS

Goodbye “Buffett Rule,” hello “Schadenfreude Plan.”

Transcript from Real Clear Politics:

MATT LAUER, TODAY: So bottom line, would raising taxes on the wealthiest Americans have a chilling effect on hiring in this country?

WARREN BUFFETT: No, and I think would have a great effect in terms of the morale of the middle class, who have seen themselves paying high payroll taxes, income taxes. And then they watch guys like me end up paying a rate that’s below that, you know, paid by the people in my office.

Ol’ Warren must have a heck of an opinion of the middle class if he thinks seeing higher taxes imposed on somebody else while their burden remains the same (or is most likely increased) will boost their morale. Using the class warfare approach to lifting spirits, I can only assume that Berkshire Hathaway’s mid-level employee bonus program consists of being handed a check for $0 and given the opportunity to take turns giving atomic wedgies to the company’s highest paid executives who hog all the best parking spots.

Does anybody really believe that even if taxes were raised on the super-rich that Buffett wouldn’t aggressively sniff out any and all loopholes (as he does now), which would still be plentiful?

Besides, the entire “tax the rich” argument is a pathetic attempt to avoid the real problem, which is out of control government spending:

According to Forbes, the 400 wealthiest individuals in the U.S. are worth a combined $1.37 trillion. Confiscating all their wealth (not just annual earnings) would buy us another 4.5 months.

And it wouldn’t even cover another 4.5 months, because politicians would say “hey, we just got $1.37 trillion in unexpected revenue — what are we gonna buy?

When anybody supports the government’s trillion-dollar per year deficit spending levels (and rising) by calling for higher taxes in a futile attempt to cover it, the morale that gets boosted the most is among those doing the spending.

Related story: The Obama administration is asking supporters to send in videos of themselves talking about the importance of raising taxes on the rich. Warren Buffett’s already done his part.

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So Simple A Caveman Would Own It

by John Myers on Wednesday, May 16th, 2012

This is article 22 of 62 in the topic Finance
So Simple A Caveman Would Own It

PHOTOS.COM
The gold market is so thin that it won’t take much buying to push the price of bullion to $2,500 per ounce.

The arrogance on Wall Street always amazes me. I have lived through three stock market crashes, one rolling recession, near hyperinflation and what was almost an economic depression. In all those cases, Wall Street was caught unaware. People who manage financial institutions were incredulous as the events transpired.

The Street’s ignorance was on full display this month when Warren Buffett’s top investment adviser Charles Munger explained that gold is a useless relic.

On May 4, the eve of the Berkshire Hathaway annual meeting, Munger, age 88, said: “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold, they invest in productive businesses.”

Munger thinks people should either be facing a Nazi occupation or else be as stupid as cavemen in order to purchase gold. If this reminds you of the Geico cavemen commercials, you won’t be surprised that Munger is big on investing in that company.

Munger said he loves Berkshire Hathaway’s portfolio, which includes Burlington Northern railroad, specialty chemicals firm Lubrizol and insurance giant Geico.

“We just have a wonderful portfolio in business, if you average them out,” Munger said. “By and large they’re doing productive, useful work.”

So confident are Buffett and his associates on Burlington Northern that in 2009, Berkshire Hathaway bought the company for $34 billion. This is just one example of Buffett’s showing faith in Barack Obama’s management of America’s economy.

Buffett and Munger forgot to consider that Berkshire Hathaway’s portfolio is mostly traded in U.S. dollars. Perhaps Munger slept through the past decade. Only that would explain how he missed the worst bear market ever for the U.S. dollar and one of the biggest bull markets for gold.

When I began as the editor for Outstanding Investments in the autumn of 2000, I urged subscribers to load up on gold. Bullion was then trading for less than $280 per ounce. Today, it trades at about $1,600 per ounce.

During those same years, the value of the dollar has gone to hell. The evidence in the graph below shows the greenback’s dreadful decline.

The U.S. Dollar Index

Munger doesn’t seem to understand that when the dollar declines, even against other currencies, the purchasing power of the dollar declines. Even if we accept the Federal government’s cooked books on the Consumer Price Index, what cost $100 in 2000 costs $133 today.

Burlington Northern stock has gone from $25 per share in 2000 to $100 per share now (in large part because of the spike caused by the Berkshire Hathaway purchase). But you have to discount one-third of that increase because of the declining worth of the dollar.

Another Obama Term Will Send Bullion Soaring

Munger does not understand what the dollar will face if Obama is re-elected.

In the 1970s, dollar inflation decimated Big Board stocks. The Dow Jones industrial average hit 996 in 1966. That index stood at 742 in 1980, a loss of 25 percent.

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More on Warren Buffett’s delinquent taxes

by John Lott on Tuesday, March 13th, 2012

This is article 142 of 307 in the topic Taxation/IRS

From Bloomberg:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed. . . .

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US Government Countersues Warren Buffett Company Over Unpaid Taxes

by Doug Powers on Monday, March 12th, 2012

This is article 141 of 307 in the topic Taxation/IRS

There’s an awful lot of legal wrangling and arm twisting going on here considering this is a company owned by a man who spends a great deal of time begging the government to make him pay more in taxes.

From Bloomberg News:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc., was countersued by the U.S. over $366 million in taxes and penalties.

NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.

Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.

The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.

While Warren Buffett is leading the charge to make it look like he wants to pay more of his personal income in taxes, his companies are paying lobbyists a lot of money to try and lower their taxes. Maybe his revised “Buffett Rule” should be putting a stop to both and calling it even. Don’t hold your breath.

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Obama’s decision on Keystone pipeline means really big money for Obama backer

by John Lott on Tuesday, January 24th, 2012

This is article 52 of 75 in the topic Oil Industry/OPEC

From Bloomberg:

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.
With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.
“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”
The State Department denied TransCanada a permit on Jan. 18, saying there was not enough time to study the proposal by Feb. 21, a deadline Congress imposed on President Barack Obama. Calgary-based TransCanada has said it intends to re-apply with a route that avoids an environmentally sensitive region of Nebraska, something the Obama administration encouraged.
The rail option, though costlier, would lessen the environmental impact, such as a loss of wetlands and agricultural productivity, compared to the pipeline, according to the State Department analysis. Greenhouse gas emmissions, however, would be worse. . . .

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What a Surprise: Obama Supporter’s Company May Benefit From Keystone Pipeline Rejection

by Doug Powers on Tuesday, January 24th, 2012

This is article 51 of 75 in the topic Oil Industry/OPEC

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Another day, another story about crony capitalism:

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.

With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.

“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”

It’s okay though, because Buffett will no doubt send any extra profit he makes directly to the US Treasury in order to lower the national debt (pause for laughter).

Buffett was so happy about the Keystone denial that he picked up a ukulele and sang “I’ve been working on the railroad”:

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Company Owned by Under-Taxed Billionaire Sues IRS for ‘Illegal’ $642 Million Tax Assessment

by Doug Powers on Monday, November 21st, 2011

This is article 115 of 307 in the topic Taxation/IRS

Warren Buffett isn’t even sure what exactly President Obama’s version of the “Buffett Rule” is, so maybe the IRS will tell him “this is part of the Buffett Rule” and hope he orders his company to pay up in a rush to not appear hypocritical in any way. I wouldn’t count on it though.

From Bloomberg News:

NetJets, the private-aircraft company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), sued the U.S. over excise taxes and penalties totaling $642.7 million assessed against the company.

The Internal Revenue Service improperly assessed the so-called ticket tax, an excise tax on payments made in exchange for air transportation, NetJets said in its complaint in federal court in Columbus, Ohio, dated Nov. 14.

NetJets seeks a refund and abatement of the ticket tax. The company claims in its suit that Congress intended the tax to apply to passengers who use commercial or charter aircraft owned by others.

Come on, Mr. Buffett — can’t your company gladly pay the tax, refuse to pass the cost on to your customers and eat the loss for the benefit of America? Berkshire stockholders will understand, won’t they? After all, the extra tax money would go to such a worthy cause.

Over the summer, Buffett spoke out against Obama’s corporate jet demagoguery — and now there’s this $642.7 million “illegal” tax assessment to fight against. If Obama isn’t careful, Buffett will express his displeasure to him directly at the next re-election fundraiser he hosts, where he’ll beg the administration to find a way to make the rich pay more.

(h/t Drew M. at Ace of Spades)

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Warren Buffett’s Son Feels Occupy Wall Street’s Pain; Update: Al Gore Now Aboard the OWS Train

by Doug Powers on Friday, October 14th, 2011

This is article 32 of 194 in the topic Marches/Protests/Riots

nullWarren Buffett, the billionaire who doesn’t think the rich give the government enough money but who refuses to set an example by voluntarily sending more in, has a son named Howard. Howard, who also thinks corporations and the rich aren’t paying their fair share which is causing the government to have to cut programs to feed the poor, is a director of Berkshire Hathaway. BH is the company that for the last decade has reportedly been in a legal battle with the IRS over a billion dollars the government says the company owes. If the Buffett bunch feel anybody’s financial pain, some of it is in a “hey, that black eye you just got hurt my knuckles” kind of way. But I digress.

From Bloomberg News:

Howard Buffett, the Berkshire Hathaway Inc. (BRK/A) director and son of Chairman Warren Buffett, said Wall Street protesters were provoked by abuses from corporations amid a widening disparity between rich and poor.

“I think it takes that to make things happen sometimes,” Howard Buffett, 56, said of the demonstrations in an interview yesterday in Des Moines, Iowa. Over the past 15 years, “we saw large corporations really screw people.”

Occupy Wall Street has drawn out protesters from New York to Seattle and gained empathizers among the top executives at Citigroup Inc. (C) and Blackrock Inc. Warren Buffett, the world’s third-richest person, has said he is concerned about inequity in the U.S. The younger Buffett, a farmer and philanthropist, said obtaining enough food has become more difficult for more people.

I refuse to comment about that last sentence because my doctor told me I should give up low hanging fruit.


 

Update: Speaking of not hungry, super-rich the Goracle has also come out in support of Occupy Wall Street. Gore points out that the “democracy is in crisis” because there isn’t enough socialism. Makes sense to me.

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