Warren Buffett released his annual letter to Berkshire Hathaway shareholders on Saturday, highlighting the company's substantial tax contributions and offering insights on management and fiscal responsibility. He noted that Berkshire paid a record $26.8 billion in income taxes for 2024, accounting for approximately 5% of total American corporate income taxes. This figure marks a significant increase from 1965, when the company paid no income tax.
In his letter, Buffett urged the government to allocate tax revenues effectively, particularly emphasizing the need to address poverty. He warned against fiscal irresponsibility, stating, "Spend it wisely," while also cautioning that poor financial practices could undermine the value of the dollar. He highlighted the importance of maintaining a stable currency and the dangers of excessive government spending.
Buffett praised Todd Combs for successfully revitalizing Geico since becoming CEO in 2020, reporting that the company's pre-tax underwriting earnings more than doubled to $7.8 billion. He described Geico as a "long-held gem" that required significant improvement, commending its recent performance while acknowledging ongoing challenges.
Additionally, Buffett noted that Berkshire's overall operating income increased by 27% to $47.4 billion, despite a decline in earnings at over half of its 189 operating businesses. The company has seen a notable rise in its cash reserves, which reached a record $334 billion by the end of the year. This increase in cash was attributed to significant stock sales, with Berkshire offloading $134 billion in net stock over the year.
Buffett also expressed confidence in his successor, Greg Abel, praising his decisiveness in capitalizing on investment opportunities. The letter concluded with a light-hearted reflection on Buffett's reliance on equities, given his lack of skills in other fields.