Warren Buffett's must-read annual letter came out last week, filled with his opinions on everything from the market to overpaid CEOs. He offers a mea culpa for his own rare mistakes that cost his shareholders money last year (though his shareholders certainly aren't complaining), and even suggests the best place to get a steak in Omaha. Call Gorat's at 402-551-3733 for reservations.
The great man also renews his criticisms of the Bush tax policies, bless his heart, taking particular aim at what Corporate America is paying -- or not paying -- for the common good. In 2003, he says, corporate income taxes accounted for 7.4 percent of federal tax receipts, down from a post-war peak of 32 percent in 1952. Last year was the second-lowest percentage recorded since data were first published in 1934. And still, he says, the administration pushes for more corporate tax breaks.
"If class warfare is being waged in America," Buffett says, "my class is clearly winning."
If Buffett finds the Republican administration in Washington wanting, he might like the Republican administration in Massachusetts better. In particular, I'd recommend one of my new personal heroes, state revenue commissioner Alan LeBovidge.
LeBovidge is no hero in the state's business community. The state's top tax cop is the point man in Governor Mitt Romney's campaign to raise new revenue by closing "tax loopholes" -- or as lobbyists around town will tell you, raising taxes on business.
Last year LeBovidge pushed several tax changes, including one scandalous tax loophole that cost the banks more than $100 million in back taxes. (Off the record, even bankers don't quarrel with the change, only that it was retroactive.) Now LeBovidge has cooked up a menu of other tax changes for the Legislature that could produce roughly $95 million in new revenue.
One change would end a practice that allows companies to sometimes avoid taxes altogether when they sell a subsidiary. Another would prevent big retailers from escaping sales tax on the printing costs of their catalogs by including a few coupons and qualifying under an exemption intended for small businesses. Another would change how securities companies are taxed.
There is no way for us mere mortals to judge whether each change makes sense; that's up to the Legislature and maybe the courts. But what should be reassuring -- unless one of these arcane changes is aimed at your bottom line -- is that the state is pushing back at the gargantuan tax-avoidance industry that the big accounting and law firms have developed into a creative art form. LeBovidge is a good guy to have on our team.
For three decades, LeBovidge did his pushing from the other side of the table, representing business clients for PricewaterhouseCoopers and its earlier incarnations, including running the national tax operations for Coopers for five years. Then, two years ago, Acting Governor Jane Swift coaxed him out of retirement to run the revenue department and Romney reappointed him. More than anything, he brings a no-nonsense, "you can't fool me, I've been there," approach to the job.
"We live in an age of aggressive tax planning," says the 61-year-old LaBovidge, and adds: "The intent here is to take out the stuff at the extremes."
No one likes paying taxes, me definitely included. But ultimately tax policy is about equity -- what's fair. Warren Buffett, for one, isn't whining: "We hope our taxes continue to rise in the future -- it will mean we are prospering -- but we hope that the rest of Corporate America antes up along with us."
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.