Market Overview

Warren Buffett Talks GOP Tax Cuts

Share:
Warren Buffett Talks GOP Tax Cuts
Related SPY
Dollar Mixed As EU Trade Spat Escalates
The Dow Averted Its Longest Losing Streak In 40 Years; Does It Matter?
SPHD: Still A Buy? (Seeking Alpha)
Related QQQ
What Is Intermarket Analysis?
April, Come She Will? Markets Kick Off Q2 On A Rough Note
Howard Marks Is Back And He Wants To Talk To You About ETFs, Passive Investing And 'Investing Without People' (Seeking Alpha)

Billionaire investor Warren Buffett thinks President Donald Trump's administration will succeed in passing a tax cut this year, and many business and investors are already positioning themselves to act accordingly.

If there are significant changes to the tax code that would reduce tax rates on capital gains or corporate taxes, then it would be beneficial to sell losing positions now and defer the gains until next year, Buffett explained to CNBC's Becky Quick in an interview Tuesday. In fact, there is "a lot of this going on" as expectations are high for a tax cut to be implemented.

"It would be foolish to have a gain now and pay 35 percent tax on it if by waiting a few months you are likely to pay 25 percent," Buffett said. "This is the year to take losses, not gains."

Meanwhile, Buffett isn't willing to assign a likelihood of a tax act being passed this year, saying it will be known "in a month or two." As such, he is sitting on the sidelines for the time being; it would be "silly" to sell anything today. Naturally, since Buffett isn't the only investor sitting on the sidelines, this likely implies that the market is being propped up by a lack of selling.

"It's an actual factor at Berkshire Hathaway and it's very, very, very seldom in my 87-years this has ever been a factor," he admitted.

Finally, Buffett thinks the bill should be considered not as a tax reform but as a tax cut, and any politician who isn't in favor of a tax cut is in the "wrong line of business."

Related Links:

How Long Does Buffett Plan On Owning Bank Of America? A 'Long, Long, Long Time'

Buffett On Brands: More Isn't Always Better

Posted-In: Becky Quick CNBCFutures Politics Economics Markets Media General Best of Benzinga

 

Related Articles (DIA + FED)

View Comments and Join the Discussion!