Warren Buffett published his annual letter to Berkshire Hathaway shareholders on Saturday.
The investor touched on Berkshire’s tax payments and urged the government to spend wisely.
Buffett applauded Todd Combs for turning around Geico and praised Greg Abel’s decisiveness.
Warren Buffett underlined the massive scale of Berkshire Hathaway’s tax payments, urged the government to spend the money wisely, and hailed two of his successors in his annual letter to shareholders on Saturday.
The 94-year-old investing icon wrote that his conglomerate paid zero income tax in 1965 — the year he took control of the company.
«That sort of economic behavior may be understandable for glamorous startups, but it’s a blinking yellow light when it happens at a venerable pillar of American industry,» Buffett said. «Berkshire was headed for the ash can.»
But in 2024, Berkshire paid $26.8 billion — the most of any US company in history and about 5% of total American corporate income taxes paid that year, Buffett said. The company has now paid in aggregate more than $101 billion of income tax to the US Treasury, he added.
Buffett urged the federal government to use the money to alleviate poverty and warned officials against overspending or destabilizing the dollar.
«Spend it wisely,» he wrote. «Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.»
The billionaire philanthropist also said: «Paper money can see its value evaporate if fiscal folly prevails. In some countries, this reckless practice has become habitual, and, in our country’s short history, the US has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency.»
The Berkshire CEO praised one of his deputies, Todd Combs, for revitalizing Geico since taking over as the insurer’s CEO in 2020.
Geico’s pre-tax underwriting earnings more than doubled last year to $7.8 billion, Berkshire’s annual report showed on Saturday. The auto insurer earned higher average premiums per policy, saw lower claims frequencies, and operated more efficiently.
«Geico was a long-held gem that needed major repolishing,» Buffett said, hailing last year’s results as «spectacular» while emphasizing there was still work to be done.
As a whole, Berkshire’s operating income jumped 27% to $47.4 billion last year, even as earnings declined at 53% of its 189 operating businesses.
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