The Oracle of Omaha just revealed his 2015 tax rate.
Legendary investor Warren Buffett made another move Monday to debunk Donald Trump: He released his tax figures, and he said he was willing to do it even though he, like Trump, is currently under audit.
In a challenge to the GOP presidential candidate in August, the Oracle of Omaha had promised to release his tax information if Trump released his own returns. Trump has so far refused to do so, but Buffett decided to make his personal returns public after the politician brought them up during Sunday’s presidential debate. In short, Buffett paid $1.8 million in federal income taxes in 2015 on about $11.6 million in income, for a rate of just under 16%.
During the debate, Trump addressed the $916 million write-down he took in 1995, revealed recently by the New York Times, which could have allowed him to cancel out his taxes for the next 18 years through deductions. While Trump admitted to using the loss to avoid paying taxes, he then turned it around to accuse Hillary Clinton’s wealthy supporters of even greater tax avoidance. “Many of her friends took bigger deductions,” Trump said. “Warren Buffett took a massive deduction. Soros, who’s a friend of hers, took a massive deduction.”
Buffett, however, pounced on the opportunity to prove Trump wrong. “Mr. Trump says he knows more about taxes than any other human,” the Berkshire Hathaway brk.a investor said in a statement. “He has not seen my income tax returns. But I am happy to give him the facts.”
Here’s the breakdown of Buffett’s income taxes for 2015, according to the statement:
- Adjusted gross income: $11.6 million
- Deductible charitable contributions: $3.5 million
- Total deductions: $5.5 million
- Federal income tax paid: $1.8 million
Trump, on the other hand, has claimed that his income in 2015 exceeded $557 million—though my Fortune colleague Shawn Tully has pointed out that the presidential candidate appears to be confusing revenues with net income, and probably made closer to $177 million last year, before taxes. The 1995 loss could have allowed him to deduct $50 million from his income through 2013 using an IRS provision called a “carryforward,” allowing him to potentially skip paying taxes that whole time. Last year, however, Tully estimates that Trump paid a tax rate of 15%, or about $27 million.
Buffett, meanwhile, says he has paid federal income taxes every year since 1944, when he was 13, and has never used a carryforward from a loss on any of those 72 tax returns. That’s not to be confused with carried interest, another provision that Trump brought up in Sunday’s debate that allows certain wealthy investors to collect a tax benefit on some investments. But Buffett has previously told Fortune that he does not have any investments that would allow him to take advantage of that provision.
In mentioning Buffett’s supposedly “massive deduction,” Trump may have been referring to the Oracle of Omaha’s charitable donations, which are indeed massive. Last year, Buffett gave nearly $2.86 billion to charity—nearly our estimate of what Trump is worth in total—much of which was in the form of Berkshire Hathaway stock—making him one of the top philanthropic donors in the world. But Buffett could only deduct a relatively small portion of that—less than $3.5 million, or 0.12% of his total donations—on his tax returns because U.S. tax law caps the charitable amount that people can deduct.
On the flip side, Trump hasn’t even come close to approaching the limit on charitable contributions: The last donation he made to his own philanthropy, the Donald J. Trump Foundation, was in 2008 for only $30,000, according to Inside Philanthropy.
On a side note, it appears that Buffett’s income has tumbled from the last time he made it public. Back in 2011, Buffett said he had made nearly $62.9 million in adjusted gross income in 2010. He also said that his taxable income was $39 million. He did not report a similar figure this time around..
The fact that Buffett released his taxes alone proves Trump wrong, Buffett said. Like Trump, Buffett is currently being audited by the IRS—an excuse that Trump has repeatedly used to justify not releasing his returns. “I have no problem in releasing my tax information while under audit,” Buffett added. “Neither would Mr. Trump – at least he would have no legal problem.”
Clinton also invoked Buffett during the debate, mentioning her “Buffett rule” proposal that would tack on a tax surcharge for people whose annual income is above $5 million. The proposal is named for the investor who has famously said that he should not pay a lower tax rate than his secretary.