Warren Buffett, the world’s fourth richest with an estimated networth of over a staggering $75 billion, once paid as low as $7 in tax for the full year. Surprised? Then here’s another one: the multi-billionaire earned just $592.5 in taxable income at the time, most of which came from his job as a paperboy. The year was 1944, and Warren Buffett, now 86 years old, was a 14-year young boy, delivering newspapers on his bicycle in Washington DC. This job fetched him $364 in taxable income for the year 1944, according to his income tax return which he shared with PBS Newshour recently.
But wait, the tally of surprises is not over yet. It’s the remaining part of Warren Buffett’s income for the year that gives us a glimpse into arguably the most successful investor’s knack for picking value investments since childhood. The 14-year old boy earned $228.5 in interests and dividends in 1944, after venturing into investing little by little as early as when he was just 11 years old.
Warren Buffett, the son of a broker and four-time Congressman, developed an interest in stock markets early on in his life. He is now considered to be among the most successful investors of all time, and is known for his knack of picking up value investments and raking in moolah by holding on to those over a long period of time. His investment habits and his earnings back in 1944 reflect his overall philosophy of investing in good quality businesses and growing the wealth over a long period of time along with the growth in the business itself.
But hold on. We are not done yet. There is one more thing that about that income tax return of 1944 that Warren Buffett recently provided to PBS Newshour, which could be pretty interesting for that little accountant inside you. Warren Buffett claimed a total deduction of $45 from his income: a $35 expense on his bike, and another $10 spent on watch repair.
Now, this is something that the United States of America’s President Donald Trump accused him of — claiming huge deductions on his incomes. Warren Buffett, in response to Donald Trump’s accusations made during the campaign trail, said that he has all his 72 income tax returns to show as proof. However, Time Money, in an article published recently, noted that President Donald Trump himself has never revealed his income tax returns.
Warren Buffet’s $7 tax payment in 1944 is equivalent of $97.13 in 2017, according to PBS Newshour calculations, while his $592.5 in income in that year would be equal to $8,221.18 today. Warren Buffett also told PBS that his newspaper delivery routes included the homes of six senators and one Supreme Court justice. He worked for both the Washington Post and the now defunct Washington Times-Herald, delivering both morning and afternoon editions, he said.