CNBC Called Out For Incorrect Stock Buyback Criticism

What’s going on CNBC? Do you think it’s easy to take on the most successful American investor and mega-billionaire? Well think again.

CNBC is currently backing off their claims, which were made earlier this week by the editor of capital markets Gary Kaminsky, where he said that Warren Buffett is a hypocrite. Warren Buffett refuted Mr. Kaminsky’s claims in an e-mail that he sent, we learned from the New York Post.

The issue is the $1.2 billion stock buyback that Berkshire Hathaway recently made. The company bought back 9200 shares from an unnamed shareholder’s estate. Reuters wrote that the buyback purchase move was done in order to help the unnamed shareholder “save substantially on taxes.”

Because of Warren Buffett’s well-known position in regards to raising taxes on the wealthy, Kaminsky took it one step further, where he said that it is “hypocritical to the maximum level” and he claims that this move was made in an effort to avoid the expected increase that will arise when paying capital gains tax next year.

Warren Buffett instantly struck back at Gary Kaminsky, where he pointed out that capital gains taxes only are imposed on the stock value at the time when it was inherited – not based on the current prices of today – so the “estate did not have a gain regardless of when the stock was sold.” (Warren Buffett is an active member of Responsible Wealth, a progressive coalition which called for an increase in estate tax this week, which is a tax on inherited assets.)

Kaminsky asserted that the “seller was better off by selling in 2012 than 2013,” added Buffett, who said it was also “incorrect,” reports the New York Post. Buffett also refuted the claim from Kaminsky stating that he never repurchases stock, where he points out specific shareholder letters as proof. But the move doesn’t come as a surprise, because Buffett does not pretend to like buying back stock at higher prices, we learned according to The Street.

After the e-mail from Warren Buffett, CNBC issued an on-air correction. “We thank Mr. Buffett for watching and setting us straight,” said Melissa Lee, CNBC anchor, this past Thursday.

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