Wednesday, January 2, 2013

Tax Break Included in "Fiscal Cliff" Bill Will Benefit Warren Buffett

Your paycheck will most decidedly go down because the bill that just worked its way through Congress failed to extend the 2% payroll tax break. But it is not the same for friends of Obama.

I already pointed out that Hollywood will get a tax break, but so will Warren Buffett.

Nick Badalamenti emails to point out that the bill has a tax break for railroads in it. ABC reports:
[...] buried in the fine print of the 150-page deal are also some lesser-known New Year’s gifts to some of Washington’s favorite industries[...]

$331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
In February 2012, Bloomberg reported that in addition to spending billions on core railroad projects:
 Warren Buffett’s Berkshire Hathaway Inc. plans to boost [other] capital spending at its railroad. 
 The railroad’s plan calls for $400 million in terminal, intermodal-expansion and efficiency projects, including on coal routes. The rail serves mines in the Western U.S., including Wyoming’s Powder River Basin, which holds the largest and cheapest U.S. reserves of the power-plant fuel.
Badalamenti concludes:
That Buffett sure is a genius, isn't he? It's almost like he made that investment with some form of advance knowledge huh? lol 


  1. Thanks for the props Wenzel!

    Just as an added clarification too, the investment I'm referring to is when he expanded initially in railroads in 2010 when everyone couldn't understand his play:

    From USA today:

    "Unlike trucks, trains don't have to compete on congested highways. Nor do railroads depend on strapped governments to maintain infrastructure.

    "They don't need the government to build them new highways and airports," he says in an interview with USA TODAY. "They've already invested heavily in their infrastructure and technology""

    That's a pretty rich comment by Buffett in light of yesterday's events.

  2. Crony capitalist buffet wins again. LOL

  3. Tunnel vision at it's finest. See only what you want to see.

  4. Warren Buffet doesn't own short line or regional railroads. He owns BNSF which is a major Class I railroad and does not qualify for this tax credit. The tax credit is for smaller railroads and has been in place for many years.

    1. Buffett's railroad operations include short-lines, such as the one referenced in the post. Just because he owns part of the Washington Post, doesn't mean he doesn't own smaller papers. Your logic is weak, but Buffett would like it.

    2. Which short line railroads does Warren Buffet currently own? Please enlighten me.

    3. The Powder River Line.

    4. Maybe Anon @ 10:57 is confusing some of the privately leased short runs by seperate and smaller business entities as actual "owners" of said lines. The other Anon's are correct, BNSF owns short lines as well and either way they are going to benefit from this tax credit-whether it is write off's for their directly owned short lines or write offs for the smaller entities LEASING those lines from BNSF.

      As you can see here, not only does BNSF own short lines-but they write contracts to make sure they can change their leasing agreement with those they lease their line to: