Berkshire Hathaway Code of Business Conduct and Ethics [pdf]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by lefstathiou on Monday May 08, 2017 @02:31PM (#14294270)

Ha, I believe I know what the parent meant. Technically by not distributing a dividend that would otherwise been paid the government does not collect on the taxes that would have been due had the dividend been paid. I see how one could stretch this to consider it "evasion" As the government has not collected taxes by there are a zillion obvious offsets to factor in here that make this a bit of a silly point to make.

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by 11thEarlOfMar on Monday May 08, 2017 @03:01PM (#14294513)

Taxes are paid by the corporation before they pay dividends. Paying dividends does not reduce a corporations tax liability.

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by lefstathiou on Monday May 08, 2017 @04:19PM (#14295216)

Correct - apologies for not being clear... if I own a business and receive a dividend, I pay taxes. So that same income was taxed first at the corporate level and second at the personal level. THe evasion - which I consider to be a stretch here - is that by not paying a dividend it becomes trapped in retained earnings and the government doesn't receive its second piece.

I'm not saying I agree with the view here but the point is technically correct. A $100 of profit for Apple in the us is taxed 40% at corporate level to become $60 and by the time it gets to me it is worth 32

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by sokoloff on Monday May 08, 2017 @04:23PM (#14295252)

Not paying a dividend isn't remotely tax evasion, IMO.

It's barely even tax avoidance...

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by ska on Monday May 08, 2017 @04:43PM (#14295406)

You two are agreeing.

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by rileymat2 on Monday May 08, 2017 @03:14PM (#14294652)

Are acquisitions pre or post tax. I Don't know.

If they are pretax - You very well could evade taxes by spending excess money on acquisitions, allowing the stock price to increase based on future earnings. Then use step up capital gains when you die to avoid capital gains when transferring wealth to offspring.

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by gibybo on Monday May 08, 2017 @03:19PM (#14294693)

Acquisitions are a capital asset and do not offset your tax liability. If a corporation earns $100 million and buys another company for $60 million, they still owe taxes on the full $100 million.

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by walshemj on Monday May 08, 2017 @06:08PM (#14296091)

But it probably ought to

[ Parent | on HN ]

Re:Berkshire Hathaway Code of Business Conduct and Ethics [pdf] by aczerepinski on Monday May 08, 2017 @09:25PM (#14297045)

Silly indeed. Over the decades when Berkshire has elected to retain earnings vs distributing to shareholders, the capital has been compounded at Warren Buffett rates of return (and taxed when it hits the books as profit). If it were distributed the treasury would get a one-time dividend payment, but then the individual shareholders would be unlikely to compound that money at ~20%.

[ Parent | on HN ]