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Note 16 on page 95 of last year’s 10k indicates Berkshire current Income tax expense for 2018 was $6,5. Billion. In 2015 it was $ 5.4 Billion, 2014 it was $3.3 Billion. This indicates an effective tax rate of 19.1%, in 2016, 8.6% in 2015, and 6.4% 2014. These figures if they are correct make BRK world class in its ability to use the tax code to the advantage of its shareholders.

To get the effective income tax rate you need to take provision for income taxes and not just
current taxes. Both of these are different from actual cash taxes paid.

Provision for taxes (for 2016) was: $9.2B (your $6.5B is simply the current provision; actual cash
taxes paid was actually just $4.7B). So the effective tax rate was (on $33.6B of pre-tax income)

Provision/pre-tax income (all GAAP of course) is the correct thing for effective tax rate because
the only difference between this and actual cash taxes paid is one of timing. Over a long (in
Berkshire's case very very long) period of time cash taxes paid will match up with the provision.

To make things even more obscure there is the table on page 85 that shows Cash paid for taxes in 2016 was $4.7 billion. I do not know how explain the differences between page 85 and 95 and hope there some one here who knows how to explain this. And of course, it is possible that Berkshire actual cash expense was more than either the figures on page 85, and 95. Am I being delusional in suspecting that Berkshire would like to make their real effective tax rat as obscure as possible?

No. Berkshire's effective tax rate in 2016 was 27%. It owed 27% of its pre-tax GAAP income to
the government. However, what Berkshire has been very adept at is issuing an interest free IOU to
the government with a very far out maturity and no interest. This is very different from say an
Apple that avoided having the tax liability in the first place.

It's float. It may not be coming due for a loong time, but it still is something owed.

Going forward the tax chance is certainly not raise Berkshire’s effective rate, and since Tax credits come off the top. The Drop in Berkshire’s Effective tax rate should be proportionally greater that the 57% drop implied by the drop from 35% to 20%. IF that average rate for the last three years was 11.37% then we can project the effective rate in future (or at lease till other party resumes control of the government) will be well below 4,9 %, but since Credits come off the top these credits could drop the company’ effective tax rate well below that more.

A more accurate, but still rough exercise, is to consider what the 2016 provision would have been at a 21% statutory rate:

Pre-tax income: $33.6B
Tax at 21%: $7B

Adjustments (this is why this is still rough, because these adjustments depend a bit on the statutory rate plus (deductions)):

Dividends received deduction: (.78B)
State taxes: .36B
Foreign tax rate differences: (.42B)
US tax credits: (.51B)
Non-taxable exchange: (1.1B)

For a provision of: 7 - .78 + .36 - .42 - .51 - 1.1 = $4.55B

I.e., an effective tax rate of 13.5%.

So the 21% tax rate dropped to 13.5%.

What the cash tax rate will be is a whole different ball game, since that is going to be heavily
affected by accelerated depreciation for taxes and the like. However, as before cash taxes vs the
GAAP provision is a matter of timing differences. The timing is only a big deal if there is a lot of
time value to money (which has to do with prevailing interest rates, availability of investments at
which capital can be deployed at and the like).
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