Warren Buffett is
one of the most famous, and certainly the richest, proponents of
raising taxes in USA...what is less often noted however is that he is also a
leading proponent of delaying tax payments for as long as possible.
In the latest and largest example, Mr Buffett’s Berkshire Hathaway has been able to defer $61.9bn of corporate taxes, the company revealed in its annual report.
Albert Einstein was quoted for saying "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it" and Mr.Buffett seems to understand pretty well what this means for the portion of taxes he deferred for so many years.
In the long term, that portion gained interests, and those interests caught other interests in an exponential crescendo, and thanks to asset swaps the chances of paying a cent to the taxmen aren't materializing any time soon.
Last year, he agreed to exchange he's $4.7bn holding of Procter & Gamble shares, on which it had made a profit of more than $4bn, for the P&G subsidiary Duracell. Tax on the capital gain will not be paid unless and until Berkshire sells Duracell, another $1bn-plus tax liability that may never come due.
Expatriates around the world can take advantage of many similar techniques (plus additional options available only to individuals) to grow their savings, as Einstein defined "TWO" groups of people in his famous quote, having a solid financial strategy in place is what will keep you in the "right one".
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