I read Frank Ryan’s op-ed piece in the September 6 Harrisburg Patriot-News.
Here is a link to it:
http://www.pennlive.com/editorials/index.ssf/2011/09/warren_buffett_complains_about.html
After cutting through the accounting-ese, his main point seems to be
that Warren Buffett is a hypocrite because he first criticizes the
current federal tax code but then uses it to benefit his company,
Berkshire Hathaway. My reaction is “Huh?” I wonder if Mr. Ryan has
ever practiced accounting in a business setting, as opposed to serving
in the Marine Corp Reserves and lecturing on ethics.
It’s not the least bit hypocritical or unethical for Mr. Buffett to
use the federal tax code to the advantage of his company while competing
in the marketplace with all of the other companies that are undoubtedly
doing the same thing. In fact, if Mr. Buffett were to ignore the
benefits of structuring that the government allows companies to take
advantage of, he would be violating his fiduciary duty to his company.
Because Berkshire Hathaway is a public company with millions of
shareholders, he would probably be liable for damages to these very
shareholders. As the CEO of a public company, Buffett is not free to
ignore tax code provisions that would benefit his company just because
he doesn’t agree with them.
Warren Buffett believes that our tax code should be changed so that
the rich pay their fair share. Many of us would like to see the laws
changed so that companies will be more focused on whether a particular
transaction will be profitable over the long term, rather than whether
it will be beneficial under the tax code. But, neither Mr. Buffett nor
any other CEO of a public company is about to unilaterally disarm and
refuse to take advantage of these provisions, while they are still in
effect. To accuse him of being hypocritical is just silly.
