Buffett has said taxes are one reason he prefers full ownership of companies, rather than investing in equities. Stockholders have to pay taxes on dividends disbursed by businesses that have already sent a portion of their profits to the government.
In 2009, Berkshire emphasized tax advantages it received when it sold ConocoPhillips shares for less than what Buffett paid, even as he expected the stock to rebound. The losses would help recover about $690 million in capital gains taxes that Buffett’s company paid in 2006, according to a statement discussing the sales.
Robert Willens, an independent tax consultant, said the Graham deal is consistent with Buffett’s other efforts.
“He does do things that are tax efficient for the corporation,” Willens said. “No question.”
While companies typically seek to limit their tax burden on deals, Berkshire stands out because of Buffett’s public posture on paying one’s fair share of taxes, Matthews said.
“If it were anybody but Warren Buffett, there’d be no story,” Matthews said. “But this is a guy who takes companies to task for going to great lengths to minimize their tax burdens, and he’s been doing it all his career.”