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Tax talk put Buffett in soup

world Updated: Aug 31, 2011 21:18 IST
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Berkshire Hathaway CEO and chairman Warren Buffett, the son of a former Republican congressman, has widened the rift with his father's party by pressing for tax increases on the wealthy and reinforcing ties with President Barack Obama.

Buffett endured scorn from Republicans this month after he called the tea party approach to budget talks "insane" and proposed raising $500 billion by taxing the richest Americans. Buffett was cited as an exemplar by Obama at least three times since July.

"Whenever Buffett says something, you can almost put money on the fact that within the next 48 hours, Obama's going to use the phrase, 'My good friend Warren Buffett says blah, blah, blah,' " said David Rolfe, chief investment officer of Berkshire shareholder Wedgewood Partners. "If you're going to tread into those waters, you need to expect the brickbats."

The tea party movement was faulted by Buffett for silencing other Republicans. Buffett plans to hold a September 30 fundraiser in New York for Obama's re-election bid, Democratic officials said.

Buffett has championed causes such as the estate tax through his career, even as he cultivated relationships with Republican leaders. A Democrat, he was an economic adviser for Schwarzenegger's 2003 campaign and repeatedly praised Bush's picks, including Federal Reserve chairman Ben Bernanke, for their handling the 2008 credit crunch.

Buffett raised his voice as Democrats and Republicans sparred over a budget deficit of more than $1 trillion. Buffett, whose fortune is valued at more than $35 billion, has delved into public policy since July in a New York Times op-ed and interviews with CNBC and Bloomberg.

"He's doing it because he believes in it, not because it's in his self interest," said Whitney Tilson, co-founder of Berkshire shareholder T2 Partners and a member of Patriotic Millionaires for Fiscal Strength, which advocates higher taxes on the rich.

Rep. Michele Bachmann, a candidate for the Republican presidential nomination, derided Buffett's tax proposal as "a sound bite" and suggested he donate his fortune to the government. Another Republican candidate, Herman Cain, said Buffett was "playing the class warfare card."

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