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TaxBuzz Top 5 - Buffett Claims 800 Companies Could Cover All U.S. Federal Taxes, Russia Fines Google $20 Decillion & More

by
Rebekah Barton
on
11/1/2024
TaxBuzz Top 5 - Buffett Claims 800 Companies Could Cover All U.S. Federal Taxes, Russia Fines Google $20 Decillion & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Buffett Says 800 Companies Could Pay All Federal Taxes in the United States

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Credit: Kevin Dietsch/Getty Images

At the 2024 Berkshire Hathaway Annual Meeting, Warren Buffett shared a striking perspective on corporate tax contributions, stating that if 800 companies paid federal taxes equivalent to Berkshire’s annual $5 billion contribution, “no other person in the United States would have had to pay a dime of federal taxes.” His remark highlights the substantial role large corporations could play in the national tax system, suggesting that increased contributions from a select group of major companies might meaningfully reduce the tax burden on individuals.

Yahoo! Finance shared that Buffet's remarks focused on Berkshire’s commitment to paying federal taxes, describing it as both a responsibility and a privilege, given the advantages and opportunities the U.S. market provides to companies. Currently, Berkshire pays a 21% corporate tax rate, a significant reduction from the historic high of 52%. Buffett noted that the federal government effectively “owns” a share of Berkshire’s earnings, and he expects the corporate tax rate could rise again due to the growing fiscal deficit.

As U.S. debt levels climb, Buffett acknowledged that contributions from large corporations like Berkshire could play a role in balancing national finances. His comments reinforce his belief in business contributions as essential for a stable economy.

2. Russia Slaps Google with Unprecedented $20 Decillion Fine for Content Violations

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Credit: 400tmax/Getty Images

In a staggering penalty, Russia has fined Google an astronomical $20 decillion -- that's $20,000,000,000,000,000,000,000,000,000,000,000. The massive penalty results from Google’s refusal to restore pro-Russian YouTube channels, which the Kremlin claims were improperly restricted. This sum far surpasses global economic output, dwarfing even the world’s total GDP of approximately $110 trillion.

This rapidly compounding fine, doubling each week, reflects mounting tensions between Russia and Google. Kremlin spokesperson Dmitry Peskov acknowledged the astronomical amount, admitting he “can’t even pronounce this figure right” and describing it as “filled with symbolism.” Per CNN, Peskov argued that Google’s blocking of Russian broadcasters impedes open access to information.

Despite these financial pressures, Google has not fully withdrawn its services from Russia, though its local subsidiary filed for bankruptcy in 2022 after the government froze its accounts following Russia's invasion of neighboring Ukraine. Google has referred to the Russian legal challenges in recent quarterly earnings, stating it does not expect the fine to impact its earnings significantly.

3. Oklahoma Lawmakers Raise Concerns Over “Parental Choice” Private School Tax Credit

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Credit: Klaus Vedfelt/Getty Images

Several Oklahoma lawmakers are voicing frustration over the Parental Choice Tax Credit, stating the program’s administration is different from their expectations during legislative approval. Instead of tax refunds, the state is mailing tax credit checks directly to private schools for families in the program, which was not clearly outlined when the bill passed.

In 2022, a similar private school voucher bill failed due to concerns that taxpayer money would go to private schools directly from the public education fund. When reintroduced in 2023, the Parental Choice Tax Credit Act was adjusted to draw from a separate $150 million fund rather than public education resources, which helped gain Republican support, especially from rural districts.

The push for compromise came after Governor Kevin Stitt pressured legislators to pass a school choice bill, even vetoing unrelated legislation to underscore his commitment to the issue. The compromise allowed $500 million in additional public school funding alongside the private school tax credits. Yet, according to local station KFOR 4, some lawmakers, like Rep. Mark McBride (R-Moore), now question if they would have approved the bill had they known how funds would be distributed, with McBride noting, “A lot of us didn’t like it, but it was better than the voucher bill was.”

4. Court Permanently Shuts Down Indiana Tax Preparer for Alleged Fraudulent Filings, Inventing Fictitious Businesses

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Credit: Scott Dunn/Getty Images

Madison Solutions LLC, a tax preparation business serving the Indianapolis area, and its owner, Juan Santiago, have been permanently banned from operating by the U.S. District Court for the Southern District of Indiana. Local news network FOX 59 reports that the injunction follows a civil lawsuit alleging that Santiago, along with his business, falsified information on numerous tax filings to secure larger tax refunds or reduced liabilities for clients, often without their knowledge.

According to court documents, Santiago engaged in a variety of schemes designed to exploit the tax code. The lawsuit claims he would fraudulently adjust clients' tax returns by incorrectly assigning deductions, statuses, and exemptions, often inventing fictitious businesses or reporting false child tax credits to reduce taxable income. This alleged manipulation led to unjustified tax refunds or significantly lowered tax burdens for many clients who did not qualify for such breaks.

The court action against Santiago and Madison Solutions comes as part of a broader enforcement push by the Internal Revenue Service (IRS) and the Department of Justice to identify and prosecute fraudulent tax preparers who exploit the system and put clients at risk.

5. Child Tax Credit Becomes a Central Focus in Presidential Campaigns, Drawing Bipartisan Support and Debate

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Credit: Win McNamee/Getty Images

The child tax credit has taken center stage in the 2024 presidential campaigns, with both Democrats and Republicans considering it essential for supporting young families and reducing child poverty. The Biden administration’s temporary expansion of the credit in 2021, amid the COVID-19 pandemic, lifted millions of children out of poverty by offering monthly payments even to non-working parents. However, the program expired after one year when Congress didn’t renew it -- efforts to expand the program again failed in August of this year.

Vice President Kamala Harris, now running for president, advocates a permanent, expanded version that would provide monthly payments to all parents, including those not currently in the workforce. Meanwhile, Republicans support increasing the credit but with a focus on working families. Donald Trump’s running mate, Senator JD Vance, has proposed raising it to $5,000 to give parents more flexibility in deciding whether to stay home with their children, reports the Associated Press.

With childhood poverty and family costs on the rise, the credit is widely seen as one of the most effective ways to support American families. According to Christy Gleason from Save the Children, expanding the child tax credit could make a profound difference in reducing poverty and creating economic security for millions.

Which headline this week most interests you?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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