Warren Buffett, who is worth $143 billion today and was once the richest man in the world, was once making mere pennies as a teenage paper boy.
Warren Buffet's 1944 tax return by PBS NewsHour
But Buffett has never begrudgingly paid his taxes. Instead, he has long argued he doesn’t pay enough taxes. Before Buffett took control of the company in 1965, he said Berkshire “did not pay a dime of income tax,” which he called “an embarrassment.
“That sort of economic behavior may be understandable for glamorous startups, but it’s a blinking yellow light when it happens at a venerable pillar of American industry,” Buffett wrote in the shareholder letter.
Buffett was born on Aug. 30, 1930, in Omaha, Nebraska, the only son of Howard and Leila Buffett (he has two sisters). His father, Howard, was a stockbroker and eventual four-term U.S. Congressman, and served as an early influence on Warren’s fascination with business and markets. When Howard was elected to Congress, the family relocated to Washington, D.C., where a teenage Warren found work delivering newspapers.
Buffett delivered both morning and afternoon editions of The Washington Post and the now-defunct Washington Times-Herald, working a route that ran past the homes of six senators and one Supreme Court justice, he told PBS.
In 1944, he earned $364 from that route. Buffett, who had started investing at the ripe age of 11, also earned $228 in interest and dividends that year, having bought three shares of Cities Service Preferred stock. That brought his total income that year to $592.50.
Under IRS rules at the time, any U.S. citizen, including a minor, who earned $500 or more was required to file a federal return, and he paid just $7 in taxes.
Just as any adult would do, Buffett made sure to write off his business expenses that year on his tax return. He attached a handwritten note documenting two business expenses: $10 for watch repair and $35 for miscellaneous bicycle costs. Buffett used both of these religiously on his morning paper route.
By deducting those costs, he lowered his taxable income like any seasoned entrepreneur or gig worker would, but he was only 14 years old at the time.
The newspaper route was just one of several early ventures for Buffett.
He and a friend later bought a used pinball machine for $25, placed it in a barbershop, and within months had machines running in three locations across Washington, D.C. They sold the operation for $1,200.
The arc of Buffett’s relationship with the IRS is, by his own account, a strange one. The man who meticulously documented his bicycle repairs at 14 became, decades later, one of the most prominent voices arguing that people like him are undertaxed.
He once pointed out that he pays a lower effective tax rate than his longtime secretary, Debbie Bosanek.
