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Friday, May 11, 2012

Buffett Defends His Tax View

OMAHA, Neb.—Warren Buffett defended his proposal to raise taxes on high earners, saying at Berkshire Hathaway Inc.'s BRKB +1.89%annual meeting that those with large incomes should pay more in the name of fairness
The billionaire investor also said the cash-rich company recently came close to landing a mega-acquisition. He fielded a host of questions about how Berkshire might boost its shares, which have largely sat out the stock rally of the past two years.
Saturday's meeting was the first appearance before shareholders by Mr. Buffett, the company's chief executive, since the 81-year-old said last month he has early-stage prostate cancer.
Mr. Buffett said on Saturday that he feels "terrific" and views the cancer as a "non-event" that hasn't changed his work habits.
The company's board has designated a man to succeed Mr. Buffett as CEO but hasn't named or told him. A proposal by a union-affiliated investment fund for greater succession transparency was defeated by shareholders, though Mr. Buffett told the sponsor that "we are on the same page" in placing a high value on planning.
"I'm perfectly fine with the level of disclosure we have," said David Rolfe, chief investment officer at Berkshire Hathaway investor Wedgewood Partners Inc., a St. Louis advisory firm with $1.7 billion in assets under management.

The all-day event opened as always with a 7 a.m., doors-open sprint by dozens of shareholders to the floor seats directly in front of the raised table where Mr. Buffett sits alongside Vice Chairman Charlie Munger. The meeting was expected to draw more than 35,000 people.

A woman folds T-shirts at Berkshire annual meeting Saturday, where Warren Buffett reiterated his view that rich people should pay more taxes.
Mr. Buffett, who owns roughly a third of Berkshire's stock, was asked repeatedly if he would consider expanding the conditions under which Berkshire may repurchase shares, and whether he will consider paying a dividend, a concept he has long opposed. Berkshire shares have vastly outperformed the stock market over the course of Mr. Buffett's four decades at the helm but have lagged behind the S&P 500 index since 2010.
At one point Mr. Buffett mentioned, unprompted, that Berkshire recently came very close to signing a $22 billion acquisition, but the deal collapsed. Mr. Buffett didn't provide any details about the target or the discussions.The meeting was Berkshire's first since Mr. Buffett made headlines by saying those earning more than $1 million a year should pay a tax rate of at least 30%.
One questioner asked whether a CEO should keep his political views "muted," prompting Mr. Buffett to respond that he has a duty to share his views on economic questions. Mr. Buffett said higher taxes on high earners are part of necessary "sacrifice" at a time when a fifth of households subsist on $21,000 or less annually. He added that high earners paid higher rates up until tax-code changes over the past two decades sharply reduced the proportion of income paid by top earners