Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B) (BRK.A), highlighted a striking corporate evolution in his 2024 shareholder letter. The conglomerate's journey — from paying no federal income tax in 1965 due to company woes, to delivering the largest corporate tax payment in U.S. history in 2024 — exemplifies its extraordinary financial turnaround under Buffett's leadership. In fact, Berkshire’s $26.8 billion contribution represented approximately 5% of all corporate income taxes collected by the U.S. government last year.
Buffett’s authority on fiscal responsibility stems from his 60-year stewardship of Berkshire, during which he transformed a failing textile company into a trillion-dollar conglomerate. When Buffett took control in 1965, Berkshire was "headed for the ash can," failing to generate profits or pay taxes for a decade — a situation Buffett described as "an embarrassment" for a once-venerable industrial firm. His late business partner, Charlie Munger, immediately recognized the acquisition as a strategic error, but Buffett pivoted Berkshire toward insurance, utilities, and value-driven investments. This shift enabled the company to build massive taxable income through relentless reinvestment rather than dividends. Since 1965, Berkshire has paid over $101 billion in cumulative federal taxes, with shareholders receiving only one nominal dividend in 1967.
