Trump tax break for 'hardworking families' hands $29bn profit boost to one of world's richest men

Warren Buffett, America's third richest man, has opposed the tax bill and wealth inequality in the US: Getty Images / Steve Pope
Warren Buffett, America's third richest man, has opposed the tax bill and wealth inequality in the US: Getty Images / Steve Pope

Donald Trump’s “tax cut for hardworking families” increased the profits of one of the world’s richest men by $29.1bn (£20.8bn) last year without him having to do a thing.

Billionaire investor and philanthropist, Warren Buffett disclosed in his annual letter to investors that the Republican tax break had delivered nearly half of the $65bn profits made by his company, Berkshire Hathaway, in 2017.

Mr Buffet – who was recently knocked into third place on the Forbes American rich list – has condemned the tax change for exactly this reason.

He has argued that major companies - including the President’s family businesses alongside Berkshire Hathaway – stand to make an undeserved windfall and push wealth inequality further.

Writing his annual CEO’s letter to accompany Berkshire Hathaway’s Annual Report 2017 Mr Buffett said the last year had been “far from standard”.

“A large portion of our gain did not come from anything we accomplished at Berkshire. The $65bn gain is nonetheless real – rest assured of that. But only $36bn came from Berkshire’s operations.

“The remaining $29bn was delivered to us in December when Congress rewrote the US Tax Code.”

Mr Trump has falsely claimed the $1.5 trillion tax bill – signed into law in December – will kick start the economy by slashing corporation tax, but would not benefit him personally.

Independent analysts say the bill is likely to slightly reduce taxes for most American families between 2019 and 2025.

However the biggest beneficiaries by far will be the top 1 per cent, and 0.1 per cent, of earners, and by 2027 taxes are predicted to have risen for the lowest income groups.

When the bill first passed a White House statement said: “We are working together to allow hardworking, middle-class families to keep more of their money, and to empower our companies and workers to dominate their global competition”.

Mr Buffett is personally worth $76bn and last year donated $3bn to charities, including the Bill and Melinda Gates Foundation.

He is widely considered one of the most successful investors in the world, but has railed against the growing financial inequality in the US, saying the benefits from the country’s economic growth disproportionately going to the richest people.

Much of his wealth been driven by his investment in Berkshire Hathaway which began as a textiles company, but now wholly owns companies such as GEICO, Fruit of the Loom and Dairy Queen.

It also has stakes in Coca Cola, Apple and American Express.