Tax law gives Warren Buffett's Berkshire Hathaway a big boost in value

Warren Buffett got a $29-billion boost to net earnings in the fourth quarter from the tax code changes.

Book value, a metric he’s called a “crude, but useful” way to track the conglomerate’s worth, climbed 13 per cent to $211,750 per Class A share at the end of 2017 compared to three months earlier, the company said Saturday in a statement. Analysts at Barclays last month predicted that the measure of assets minus liabilities would rise as Berkshire lowered its tax liability on some appreciated investments. 

Buffett had a mixed reaction to the tax overhaul passed by Congress last year. In January, he praised how the changes mean business owners will get a bigger share of profits and said he would have voted for it as a representative of Berkshire’s investors. Still, when asked if he would have encouraged legislators to support or fight it, Buffett said he would have gone with a different bill. The billionaire investor has long advocated for higher taxes on the wealthy, while the new law reduced the top income-tax rate. 

Berkshire’s operating earnings, which excludes some fluctuations in investments and derivatives, slumped 24 percent to $3.3 billion during the fourth quarter compared to the same period a year earlier.