A composite image of Warren Buffett (left) and Sen. Bernie Sanders (right).
CNBC/Getty Images/Insider
- Sen. Bernie Sanders criticized Warren Buffett for staying out of a labor dispute.
- Sanders asked him to help striking workers at Berkshire Hathaway subsidiary Special Metals.
- Buffett declined, citing his hands-off management approach, prompting a rebuke from Sanders.
Sen. Bernie Sanders criticized Warren Buffett, and highlighted his low rate of tax, after Buffett declined to intervene in a labor dispute.
Sanders implied that Buffett was falling short of his own ideals by letting a labor dispute drag on at Special Metals, a West Virginia firm owned by Buffett’s Berkshire Hathaway holding company.
Some 450 Special Metals workers have been striking since October. They object to plans to limit pay rises to 1% or 2% for several years, to increase healthcare premiums, and to limit vacation time.
Negotiations over a return to work paused in mid-December, per the local news station WHCS, and were not due to resume until January.
Sanders in a letter to Buffett called on him to use his position as Berkshire Hathaway CEO to end the dispute and give the workers a more generous settlement, as Insider’s Theron Mohammed reported on Friday.
Berkshire Hathaway owns Precision Castparts, which in turn owns Special Metals. But, in a response to Sanders, Buffett said that he would stay out of it.
He cited a longstanding Berkshire Hathaway policy of not interfering in how its subsidiaries are run beyond choosing the CEO, in this case Mark Donegan.
Buffett said he would pass on Sanders’ message but would make no recommendation for how Donegan should proceed. “He is responsible for his business,” Buffett wrote.
Sanders responded on Friday by saying Buffett was not living up to his conviction that the US needs to reduce wealth inequality, and also noting his huge wealth.
—Bernie Sanders (@BernieSanders) December 31, 2021
Sanders wrote: “Warren Buffett is a billionaire worth over $100 BILLION with a tax rate of just 0.10%.
“He’s spoken eloquently on the crisis of growing inequality. But why doesn’t he want to make sure the steelworkers of Special Metals are treated with dignity and respect?”
Sanders did not address Buffett’s stated reason that he wouldn’t intervene because of Berkshire Hathaway’s ownership style.
The 0.1% tax rate Sanders cited was reported in June by ProPublica as part of an investigation into how the super-wealthy avoid tax.
Per its calculations, the $27.3 million tax he paid on his personal income between 2014 and 2018 was only 0.1% of the amount his total wealth grew in the same period, some $24.3 billion.
As Insider’s Theron Mohammed reported at the time, Buffett’s increases in net worth do not attract tax because they mostly come in the form of Berkshire Hathaway stock gaining value.
The company doesn’t pay dividends and instead reinvests, which does not attract tax. Buffett defended the arrangement by noting that most of his wealth is due to eventually be given away.
Buffett has pledged 99% of his net worth to philanthropy.
According to Newsweek, he said the money “will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt” via taxes.
