Hillary Clinton is set to campaign alongside Warren Buffett Wednesday, where the two will reportedly tout their shared support of higher taxes on the wealthy.
Buffett, a billionaire investor and longtime Clinton supporter, once famously wondered why he was paying a higher tax rate than his secretary. His support for raising taxes on the wealthy led to the “Buffett Rule,” which President Obama put forward in 2011 as a way to tax people earning more than $1 million at 30 percent.
But Buffett differs from Clinton on a tax issue she has brought up repeatedly on the campaign trail: tax inversions, or a process by which companies merge with overseas firms so they can move their headquarters abroad and pay lower corporate taxes.
While Clinton has called tax inversions a way of “gaming the system,” Buffett’s company, Berkshire Hathaway, has invested heavily in firms that have undergone corporate inversions.
For example, Berkshire Hathaway poured $3 billion into a deal between Burger King and Tim Hortons in which the former purchased the latter, a Canadian coffee shop, and attempted to shift its headquarters to Canada. Many observers called the merger a tax inversion and accused Burger King of fleeing taxes in the U.S.
Buffett’s firm had the largest stake in Chicago Bridge and Iron Co., which relocated to the Hague, as well as stakes in a number of other companies that moved abroad through inversions, such as Liberty Global and a division of DuPont Co. that ended up in Bermuda.
Clinton publicly condemned the merger of pharmaceutical giants Pfizer and Allergan earlier this year, although Pfizer has been a major donor to her family’s foundation.
“For too long, powerful corporations have exploited loopholes that allow them to hide earnings abroad to lower their taxes. Now Pfizer is trying to reduce its tax bill even further,” Clinton said of the deal.
Buffett, who will host a private fundraiser for Clinton in Nebrasksa before joining her for a public rally Wednesday, has profited from similar tax inversions. Critics say the country’s punishingly high tax rates force domestic firms to consider such deals in order to protect their earnings.
