Orrin Hatch, a United States Sen. and the top Republican on the tax-writing Finance Committee, said that Warren Buffett, billionaire investor, recently called him to find out if there was anything that Congress would do in regards to companies that chose to move abroad for tax reasons.
Lawmakers, specifically Democrats, are very concerned about inversions, in which a United States company will buy a foreign competitor and then make its home country that new tax domicile. The inverted company will usually end up with much lower tax rates.
Warren Buffett has been on the same side as the Democrats and Pres. Barack Obama on a great number of tax issues, but many Democrats decided to criticize him when he chose to put up money for the Burger King Worldwide deal to purchase Tim Hortons, a Canadian chain, for $11.5 billion.
Democrats were very upset with this deal once they found out that Burger King was planning to be taxed as a Canadian company. Buffett, as you can imagine, had to defend his role in this purchase and said that moving really didn’t have anything to do with taxes.
Hatch mentioned that on Thursday, during a speech to the United States Chamber of Commerce, prior to all of the fuss, Buffett was curious to know what lawmakers were planning to propose on inversions.
“He called me to say, ‘You’ve got to do something about tax inversions,” said the Sen. from Utah. “I believe that was before he entered into the Burger King situation.”
Democrats have put forth proposals to make inversions a lot more difficult in numerous ways or less lucrative financially for companies to leave the US. On Thursday, Hatch mentioned that a large majority of these ideas were politically driven.
Hatch, along with Sen. Ron Wyden, the big lawmakers on the Senate Finance Committee, said they are working on putting together their own inversion plan but did not provide any details as to what they are considering.
Hatch says that Buffett, who he calls a friend, has mentioned in the past that responsible businesses attempt to reduce their tax bills and occasionally make transactions that are tax driven.
“I don’t blame him,” said Hatch. “I don’t like it, but he’s living within the law.”