Warren Buffett: Tax overhaul gives businesses 'huge tailwind'

Investor Warren Buffett said in an interview on Monday that businesses will benefit from the Republican-backed tax-reform plan.

The billionaire Democratic donor told CNBC that the tax plan, which President TrumpDonald John TrumpEsper sidesteps question on whether he aligns more with Mattis or Trump Warren embraces Thiel label: 'Good' As tensions escalate, US must intensify pressure on Iran and the IAEA MORE signed into law in December, gives U.S. businesses a "huge tailwind."

The law slashed the corporate tax rate from 35 percent to 21 percent. 

ADVERTISEMENT

"It certainly means corporations will pay quite a bit less in tax than they otherwise would," Buffett said. "When we make money in 2018 domestically, and subject to a lot of little things here and there, basically we'll be paying at 21 percent instead of 35 percent. That's a lot of money."

Buffet has opposed lowering taxes in the past, but said in October that he hoped the corporate tax rate would be lowered.

"I would like it in the sense that it would be good for a million shareholders of Berkshire [Hathaway] in terms of their returns," he said, referring to his company.

Corporations such as Starbucks, Home Depot, and Disney have announced employee bonuses, wage increases and better benefits as a result of the tax plan.

Critics of the plan say it disproportionately helps rich Americans and corporations instead of Americans with lower incomes.

Buffett said last week that the tax law has made his company billions of dollars.

“Berkshire’s gain in net worth during 2017 was $65.3 billion, which increased the per-share book value of both our Class A and Class B stock by 23 percent,” Buffett wrote in a letter to Berkshire Hathaway shareholders that accompanied the company’s annual report.

He said much of that gain was due to the tax-reform bill.

“A large portion of our gain did not come from anything we accomplished at Berkshire. The $65 billion gain is nonetheless real — rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code,” Buffett wrote.