Warren Buffett surprised many by selling a significant portion of his giant Apple stake, and the reason for the sale was even more surprising – taxes. Buffett, who slashed Berkshire Hathaway’s Apple shares by 13% in the first quarter after a huge profit, said the sale was for tax reasons. He hinted that selling the company could be a way to avoid paying even higher taxes if tax rates go higher to help cover America’s ballooning fiscal deficit. “At least I don’t mind writing that check and I really hope with all that America has done for all of you, you won’t mind if we do that and if I do that That’s at 21% this time.” and we’ll get to a slightly higher percentage later on, I don’t think you’ll really mind that we sold a little Apple this year,” Buffett said at Berkshire’s annual meeting back in 2015. in the first day of this month. As a corporation, any income generated by Berkshire, whether it is from a wholly owned business like Dairy Queen or an equity investment like Apple, is taxed at a flat rate. 21% of federal enterprises as of 2018. There are no special tax rates on capital gains in a corporation once they become part of the entity’s income. The Oracle of Omaha, who paid more than $5 billion in corporate taxes in 2023, believes corporate tax rates could go higher to offset the growing fiscal deficit. According to the Treasury Department, the federal government has spent $855 billion more so far than it took in in fiscal year 2024 ending September 30. In fiscal year 2023, the total deficit amounted to about 1.7 trillion USD. “They can change that percentage any year… I would say that with the President’s fiscal policies, I think something needs to happen. And I think higher taxes are very can happen. And the government wants a bigger share of your budget.” my income or Berkshire’s, they can do it,” Buffett said. Corporate income tax rate The corporate tax rate in the US has averaged 32.1% from 1909 to 2024 with high “It was basically 35%,” said Kelly Gillette, a partner at Armanino LLP in Texas, in the late 1960s. He believes something has to happen and he believes corporate interest rates will go up.” AAPL Mountain 2016-01-01 Apple Berkshire started buying Apple stock in 2016, and by mid-2018 it had amassed 5% ownership of the iPhone maker, a stake worth 36 billion USD. The bet now accounts for 40% of Berkshire’s entire equity portfolio and has earned Berkshire more than $100 billion. Many have speculated that Buffett may continue to reduce Apple’s stake The 93-year-old told shareholders that Berkshire’s total cash position could even reach $200 billion by June, up from a record $189 billion in the first quarter.