Investing

Warren Buffett Invests in Digital Bank, Responds to Tax Story

Paul Ausick

Published: June 10, 2021 9:00 am

Investing in a bank that offers cryptocurrency investment products doesn’t seem like something that Berkshire Hathaway Inc. (NYSE: BRK-B) would be interested in. While Buffett’s partner and executive vice chair, Charlie Munger, has been more outspoken in his dismissal of cryptocurrency, Buffett himself has only called investing in cryptocurrency “gambling.”

Buffett invested $500 million in Brazil’s privately held Nubank, which bills itself as the “world’s largest independent digital bank.” The investment was “an extension” of the bank’s series G fund-raising round completed in January.

Last October, Nubank acquired a digital platform called Easynvest that permits commission-free investments to ETFs and other exchange-traded products, including funds that invest in bitcoin.

A Tuesday report from ProPublica revealed just how much income tax some of the nation’s richest people pay — or don’t pay. The report estimated that for the period between 2014 and 2018, Buffett himself paid just 0.1% of his income in tax.

In a pre-publication statement to ProPublica’s Jesse Eisinger, Buffett responded by pointing to Berkshire Hathaway’s and his own transparency regarding taxes. Buffett also reiterated his often-stated comments on the U.S. tax code:

I continue to believe that the tax code should be changed substantially. I hope that the earned-income tax-credit is greatly expanded and additionally believe that huge dynastic wealth is not desirable for our society. Perhaps annual payout requirements should be increased for foundations. Some time ago, I testified before Senator Baucus in favor of increasing and tightening estate taxes. (My persuasive powers proved to be limited.) …

I remain OK with what I said, though its effect in Washington was zero.