Barron Trump’s new drink company announces first flavor ahead of launch

Barron Trump, the youngest son of President Donald Trump, is one of five partners in a new beverage business called Sollos Yerba Mate Inc

Barron Trump’s new drink company is gearing up for its launch(Image: Chip Somodevilla, Getty Images)

Barron Trump’s new drink company is gearing up for its debut, and the brand has unveiled its first flavor.

The youngest son of President Donald Trump, who made a disturbing sex comment on stage that silenced the alarmed audience, and first lady Melania Trump is listed as one of five partners in Sollos Yerba Mate Inc., based on business filings submitted in Florida and Delaware this past January. Yerba mate is a caffeinated herbal beverage – a trendy drink option that often serves as a substitute for coffee across America.

Mar-a-Lago has 1 ‘unspoken rule’ about Barron that everyone must follow

It the forthcoming product launch on LinkedIn, posting footage of a carton of Sollos Yerba Mate-branded beverages perched on a surfboard drifting across the water. It comes after Melania Trump was left humiliated by a screaming kid’s 3-word comment as he pointed at her.

The post’s text announced, “Introducing our 12-pack: Pineapple + Coconut. Launching May 2026.”

The debut offering of the caffeinated, earthy beverage will feature tropical notes. On their LinkedIn profile, the Sollos Yerba Mate squad characterizes the enterprise as a “lifestyle beverage brand built around yerba mate and clean, functional ingredients.”

Speaking to Newsweek, a company representative explained, “In the foreseeable future Sollos will only have one recipe. We didn’t set out to make a flavor lineup; we set out to make the perfect drink. Most brands launch with five flavors, hoping you’ll like one of them. We spent all of our time, energy, and resources obsessing over a single recipe until it was flawless.”

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Sollos announced the first flavor of its yerba mate drinks will be pineapple and coconut(Image: Linkedin)

What role does Barron play in Sollos Yerba Mate?

The 20 year old is registered as a director of the company along with Spencer Bernstein, Rudolfo Castello, Stephen Hall, and Valentino Gomez.

The firm secured $1 million in funding via a private placement, according to U.S. Securities and Exchange Commission documents. The filing listed the five partners’ names and the business address.

Sollos operates from a 4,500-square-foot location in Palm Beach, Florida, situated roughly 1 mile from the president’s Mar-a-Lago estate.

Barron is presently a second-year student at New York University’s Stern School of Business. He relocated to the Washington, D.C., campus at the beginning of his sophomore year last autumn, following his freshman year at NYU’s Manhattan location.

Bernstein, who serves as SOLLOS Chief Operating Officer, and co-founder Hall revealed in separate LinkedIn announcements that they are taking temporary leave from university to concentrate on Sollos, though both intend to resume their studies and complete their degrees.

Barron’s drink business has link to father’s campaign donor

Barron’s latest business endeavor has sparked some scrutiny following revelations that Sollos is connected to his father’s campaign contributor and former tennis partner.

Trump’s long-time associate Jay Weitzman is the proprietor of the $16 million five-bedroom residence near Mar-a-Lago where the company is headquartered, based on a Newsweek investigation. Weitzman runs a parking enterprise that has been awarded federal contracts since 2005, and he has previously contributed to the president.

There is no suggestion of wrongdoing. Weitzman made clear to Newsweek that he holds no stake in, nor any connection to, Sollos. He explained that the company is registered at his address simply because his grandson, Bernstein, who serves as one of the firm’s directors, resides with him.

A bold new idea is taking the Democrats by storm: massive middle-class tax cuts.

Last week, two of the party’s rumored 2028 candidates — Sens. Chris Van Hollen and Cory Booker — unveiled plans to fully exempt tens of millions of Americans from federal income taxes.

Under Van Hollen’s policy, individuals who earn less than $46,000 — and married couples who earn less than $92,000 — would owe nothing to Uncle Sam each year (outside of their payroll taxes, anyway). And millions of Americans who earn more than those sums would also receive a hefty tax break. Under Booker’s plan, meanwhile, Americans would pay no federal income tax on their first $75,000 in earnings. Both senators would finance their tax cuts by soaking the super rich.

The details of the two bills vary considerably. But each reflects the same general proposition: The Democratic Party needs its own “No Tax on Tips.”

In 2024, Donald Trump endeared himself to many service workers by arguing that their tipped income should be exempt from federal taxes. Kamala Harris quickly embraced the policy. But by then, Trump had already branded the GOP as the party of simple, sweeping tax cuts for the working class.

Many Democrats want to steal that mantle. And “no federal tax on any of your income” presumably beats “no tax on tips” (or, as Trump has also enacted, “no tax on overtime”).

But the two proposals also represent the culmination of a decades-long trend in Democratic politics.

Call it the rise of 99 percentism: The belief that only the top 1 percent, or even the small coterie of billionaires within it, should be expected to finance government benefits.

For much of the 20th century, Democrats were comfortable asking the middle class to pay higher taxes in exchange for more services. By the 1990s, however, the party no longer had the stomach to raise taxes on anyone but the upper middle class and above. In 2008, Barack Obama promised not to raise taxes on any family earning less than $250,000; in 2020 and 2024, Joe Biden and Kamala Harris raised that cutoff to $400,000.

The party’s left flank, meanwhile, has also lost its enthusiasm for broad-based taxation. In her 2020 presidential run, Sen. Elizabeth Warren (D-MA) proposed a wealth tax on fortunes of over $50 million. More recently, Sen. Bernie Sanders (I-VT), one of the last prominent voices on the left to champion higher middle-class taxes, unveiled his new “defining vision for our age” — a bevy of new social programs funded exclusively through wealth taxes on billionaires.

This shift has a coherent political logic. Democrats have grown increasingly dependent on upper middle-class support — while Americans writ large have grown increasingly distrustful of their government (and thus, more reluctant to shoulder the costs of expanding it).

As a substantive matter, however, 99 percentism is incoherent. Democrats can support a robust welfare state or ultra-low taxes on the middle class — but they can’t do both.

“If what you end up with is a tax code that is nominally progressive but low, you will have a government that’s too poor to achieve the goals that the American people want to achieve,” Vanessa Williamson, a senior fellow at the Brookings Institution, told me. “You’ll have a poor democracy, and it’s very hard to defend a poor democracy.”

The case for “no tax on incomes”

Before examining the problems with Booker and Van Hollen’s tax packages, it’s worth spelling out the case for them in a bit more detail.

Ever since the post-pandemic surge of inflation, America has been in an anti-tax mood. Between 2020 and 2025, the share of Americans who deem their federal tax burden “too high” jumped from 46 percent to 59 percent in Gallup’s polling. Over roughly the same period, the percentage of voters who think the government is “trying to do too many things that should be left to individuals and businesses” rose from 41 percent to 55 percent.

Recent trends in state-level fiscal policy appear to reflect these sentiments. In 2023 and 2024, states collectively cut taxes by $15.5 billion and $13.3 billion respectively — the two largest annual reductions on record.

In this context, calls for dramatically reducing ordinary Americans’ tax bills could plausibly resonate.

Furthermore, middle-class tax cuts are a simple and fast-acting means of addressing voters’ affordability concerns. Every household has a unique set of burdensome expenses. The government can’t create a program or price control that directly addresses each and every one. But if you give families more cash, they can use it to defray whichever costs they find most burdensome.

Of course, Uncle Sam needs tax revenue to function. But a proponent of the Booker-Van Hollen vision could insist that the richest 1 percent is fully capable of shouldering this burden.

After all, that small segment of the public commands about 21 percent of the nation’s income and 32 percent of its wealth. And thanks to various loopholes, some billionaires pay a lower effective tax rate than middle-class families. By shaking down these pampered plutocrats, Democrats can drum up enough money to cut the middle class’s taxes — and increase their social benefits — simultaneously (at least, according to this line of thinking).

Trump has demonstrated the political potency of big, simple tax cuts for workers. But his party’s inveterate commitment to billionaires’ interests limits how much it can actually do for the middle class. Democrats therefore have an opportunity to beat Trump at his own game.

Booker and Van Hollen’s bad math

Booker and Van Hollen are probably right to see some political upside in middle-class tax cuts. But they haven’t been clear-eyed (or else, forthright) about the costs of their agendas.

Van Hollen’s middle-class tax cut would reduce federal revenue by $1.5 trillion, while Booker’s would slash it by more than $5.5 trillion. (For context, “No Tax on Tips” — the inspiration for these packages — will cost the Treasury just $83 billion over the next 10 years.)

And yet, both senators officially support drastically expanding America’s welfare state. They have each backed legislation that would subsidize child care costs, socialize the health insurance system, make public college tuition-free, give “bonds” to babies, establish universal prekindergarten, and provide working-class families with a child allowance, among other things.

Taken together, these initiatives would increase federal spending by more than $30 trillion over a 10-year period.

Even if one stipulates that Booker and Van Hollen’s Medicare For All bill is a pipe dream — and that their real health care goals are to reverse Trump’s Medicaid cuts and expand Obamacare subsidies — their social agenda would still cost many trillions of dollars.

And, while nobody wants to hear about it much these days, merely financing our existing spending commitments to the elderly remains an unsolved problem. Both senators — like virtually all Democrats — oppose cutting Social Security and Medicare benefits. Yet the former program’s trust fund is poised to run out in 2033. At that point, sustaining existing Social Security payment levels will require upward of $4 trillion in new funding (over the standard 10-year budget window). Medicare is also paying out more than it takes in. And covering that gap will cost trillions over the coming decade.

All this makes it hard to reconcile the Democratic senators’ spending commitments with their tax plans. Nonetheless, both Booker and Van Hollen insist they don’t wish to increase America’s high and rising deficits.

A welfare state can’t subsist on the rich alone

In keeping with 99 percentism, Booker and Van Hollen ostensibly believe that Democrats don’t need to choose between building a Western European-style welfare state and slashing middle-class taxes so long as they also soak the rich.

But this is implausible for several reasons.

For one thing, taxes on the super rich don’t “pay for” new social programs in quite the same way that taxes on the middle class do.

This is because the point of offsetting welfare spending with taxes is, in part, to prevent inflation (a phenomenon Democrats have some unfortunate recent experience confronting).

When you expand social benefits, you increase demand for goods and services throughout the economy. Give a working-class family a child allowance, and they’ll be able to afford more discretionary purchases, such as electronics or restaurant meals. Expand access to health insurance, and more people will visit doctors and undergo medical procedures. Subsidize child care and more parents will enroll their kids at daycare centers.

As Americans increase their consumption in this way, they will bid up the price of labor and other resources — unless tax hikes reduce consumer demand in other parts of the economy.

Unfortunately, billionaire taxes aren’t very effective at reducing demand. Shave $10 billion off Jeff Bezos’s $224 billion fortune, and he won’t have to change his lifestyle at all. His savings will fall. But his consumer spending will likely remain about the same as it was before.

Separately, the amount of revenue one can squeeze from the super rich is inherently limited: If you raise their income tax rates past a certain threshold, they will respond by working less or shifting their capital overseas. If you expropriate their wealth at a high enough rate, meanwhile, they will eventually cease to be super rich.

To be sure, the government can (and should) extract trillions of dollars in additional revenue from the super rich. But it almost certainly cannot collect enough cash from the 1 percent alone to finance both a robust welfare state and low middle-class tax rates.*

For these reasons, no large welfare state on Earth is funded overwhelmingly through taxes on the rich. To the contrary, by some estimates, Western European social democracies actually tax billionaires at a lower rate than the United States does. America isn’t a low-tax nation because we refuse to soak our wealthy, but rather because we lightly tax our working, middle, and upper-middle classes.

Senate Democrats aren’t Bolsheviks

Thus, Booker and Van Hollen’s fiscal agendas simply do not work, even if we assume that congressional Democrats’ appetite for taxing millionaires and billionaires is unlimited.

But of course, this is not actually the case.

As we saw during the Biden presidency, moderate Democrats are willing to tax the rich — but only so much. Even the House version of Biden’s Build Back Better Act — which proved too progressive to pass the Senate — would have raised taxes on the wealthy and corporations by only $1.5 trillion. The party’s ultimate spending bill, the Inflation Reduction Act, generated only about $457 billion in revenue.

If Democrats reclaim full control of government in 2029, their Senate majority is likely to be narrow. The party’s most moderate members will therefore have veto power over its fiscal policy.

Even if these centrists support taxes on the rich 10 times larger than those endorsed by former Sens. Joe Manchin and Kyrsten Sinema in 2022, Democrats still wouldn’t be able to implement more than a fraction of their social agenda (at least, without running up the deficit in a potentially inflationary manner).

In practice then, every dollar that Democrats dedicate to middle-class tax cuts is one that they cannot spend on expanding the welfare state.

“If you’re going to have a trillion dollars — or maybe a little more — from new taxes on the wealthy, you want to make sure that those funds are addressing America’s biggest problems,” Will Raderman, a senior policy adviser at the Searchlight Institute, told me. “Shrinking the tax base does not seem like it should be a top priority.”

Indeed, it is hard to argue that lowering middle-class tax rates is more important than reversing Trump’s Medicaid cuts, ending child poverty, fixing America’s unemployment insurance system, or stabilizing Social Security and Medicare’s finances.

Americans might feel like their taxes have grown intolerably high. But federal rates for the bottom 80 percent of workers have actually fallen sharply in recent decades and sit near historic lows.

What’s more, Booker’s tax cut would deliver its largest benefits to the upper middle class. Those between the 80th and 90th percentile of the income distribution would see their after-tax earnings rise by $7,755 — while those in the bottom 20 percent would collect just $1,840, according to the Penn-Wharton Budget Model.

This does not seem like a progressive way to allocate a fixed pool of tax dollars.

Maybe the substantive costs of giant tax cuts would be tolerable, if the electoral upside was truly immense. But there’s reason to doubt that. For all the hype around “No Tax on Tips,” presidents in both parties have showered tax cuts on voters throughout the last 25 years without any consistent boost to their electoral fortunes.

“The political benefits of giving people cash — through tax cuts or rebates — don’t seem particularly large,” Brendan Duke, a senior director at the Center on Budget and Policy Priorities, said. “Donald Trump did a large tax cut in 2017 and his party proceeded to lose the House in the midterm elections of 2018. He gave out rebate checks in 2020 and then ended up losing the presidential election.”

Perhaps this time is different and Democrats can win in 2028 by pledging to slash middle-class taxes. If they do, however, then the election’s loser won’t just be the Republican Party — but also, American liberalism’s core economic project.

Canada is in crisis mode, and thanks to their Supreme Court, it’s about to get a helluva lot worse.

First, here are just a couple of major issues Canada’s dealing with:

Housing prices have exploded. Their home prices are soaring, while their wages are dropping.

INSANITY: Canada now ranks #2 in the WORLD for worst home price-to-income ratio‼️

📊 According to Statista, the average Canadian home costs over 9x the average household income — worse than the US, UK, Australia, Germany, and Japan.

💥 This is unsustainable.

Waiting times for medical care stretch months, sometimes longer. And if you have an emergency, you could still be waiting 15 hours or more, like this poor woman with an appendix about to burst.

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A woman in Canada with a swollen appendix heads to the ER — the board shows a 15+ hour wait. She’s already been there 3 hours. That’s 18 hours total. Welcome to Canada’s “universal healthcare.”pic.twitter.com/tvjTeqWKMR — Brandon Straka #WalkAway (@BrandonStraka) March 3, 2026

Across the country, many Canadians are wondering how much more pressure their country can take before it finally crumbles. You can’t blame them. It’s a mess.

Which brings us to Canada’s latest Supreme Court ruling. Now things are really reaching “code red” status.

In a decision that could literally cause massive financial consequences, the Supreme Court of Canada ruled that Quebec cannot exclude asylum seekers from taxpayer-subsidized daycare.

Now, when many people look at this, they think, “Oh, how humane and lovely.” But no, there’s much more to the story. It’s way bigger than daycare.

With this ruling, the high court stretched the definition of discrimination so far that it could now force Canadian governments to open up even more taxpayer-funded benefits to people who just arrived in the country, without a pot to piss in.

And for a country already in crisis mode, barely managing to maintain housing supply, medical capacity, and a slew of other public services, that possibility is like a blaring alarm bell ringing at warp speed.

To really understand why this ruling is causing so much concern, you have to look at how the court framed everything.

It all started when Quebec decided to limit access to its subsidized daycare system. The program is heavily funded by taxpayers and was supposed to be for residents of the province.

But the Supreme Court ruled that excluding asylum seekers from that system counts as “discrimination,” particularly against mothers. So, the court just decided the policy had unequal effects, even though it was never written to target women.

Many experts say the decision lowers the bar to an absurd level. Now everybody and their brother will be suing to get access to government programs.

Here’s how one legal observer described the implications:

The Supreme Court found 8-1 that Quebec’s decision to exclude asylum seekers from taxpayer subsidized daycare discriminates against mothers. The CCF intervened to try to clarify the kinds of evidence that can be used in discrimination cases. More to come.

The majority decision here is stunning. One need not prove that a distinction between groups is arbitrary to prove discrimination. Almost any evidence of a distinction will do. Intersectionality is to be considered. Only certain groups can face discrimination.

Today’s SCC decision finding it’s discriminatory to exclude asylum seekers from subsidized daycare has huge financial implications. Taxpayers may now need to fund anyone who enters Canada and claims asylum equally in housing, health too, unless gov’ts use notwithstanding clause.

As you can imagine, the reaction to the ruling has been fast and furious.

For people who see this as a complete disaster, the concern isn’t just about immigration policy. It’s the same issue we’re having in the US, where courts are reshaping politics through sketchy legal moves, not public debate and voting.

Critics believe decisions like this transfer control over major spending questions from elected officials to judges, and that’s not how it should be. Sadly, Americans know how this works firsthand.

This shift will have huge implications on how Canada manages immigration, welfare programs, and public spending.

One angry reaction summed up the fears many Canadians have.

Canada’s Supreme Court has confirmed that the welfare system in Canada must be thrown open to the entire Third World.

We are governed by insane ideologues who wish to force us, a nation of 40 million, to offer unlimited resources and funding to all and any of the billions of Third Worlders who might happen to land upon our shores.

Of course, if Canada is the place where a Third Worlder with no skills, no intelligence, and no ability to be productive can, upon arrival, get free housing, daycare, and funding for groceries and other living expenses, we should expect that the word would spread like wildfire and soon all of their cousins and spouses (but I repeat myself) would come flooding in.

This decision is just one more proof that the people governing us seek our utter destruction.

Let that sink in.

Canada’s social programs were built with certain limits in mind. When courts start changing those limits and adding their own “spin,” the consequences will pile up real quick.

And for a country already in chaos thanks to housing shortages, low wages, strained healthcare systems, and rising public costs, the stakes couldn’t be higher right now.

As you can see, this is about so much more than daycare. But it’s the babysitting part of this story that will light the match that starts a wildfire.

OH< CANADA, thanks for helping relive our crisis of stupidity, or having the gates open to every foreign criminal alien.

Boxes of Trump steaks on display at The Sharper Image during the product’s short run in the 2000s.© Stephen Lovekin/Getty Images

From Atlantic City’s Trump Taj Mahal to Trump Magazine and various products and services in between, Donald Trump’s unsuccessful business ventures have piled up well before he first became U.S. president in 2016. But few perhaps stand out more than Trump Steaks, aka the real estate mogul’s foray into the beef world that lost steam mere months after its launch in mid-2007. The meaty enterprise still comes up in political discourse as a prime example of Trump’s business failures, with poor sales cited as the main reason for it going up in flames. But similar to how the President’s no tax on tips law has hidden downsides, this Trump initiative — and its ultimate failure — was a bit more complicated than it seemed.

For some background, the Trump Steaks trademark was registered in August 2006, but the products didn’t hit the market until the following year. Debuting with the tagline, “The World’s Greatest Steaks,” Trump Steaks were sold exclusively at The Sharper Image (though they were reportedly the same steaks available at Trump’s golf clubs). At one point, Trump “Steakburgers” were also sold through QVC, though it’s unclear if other Trump-branded cuts hit the shopping network as well. Either way, the meat vanished just two months later, short of what some sources say was supposed to be a three-month trial period. In a 2016 interview with Think Progress, Sharper Image CEO Jerry Levin said, “We literally sold almost no steaks … if we sold $50,000 of steaks grand total, I’d be surprised.”

Mixed reviews and high prices didn’t help Trump Steaks take off

If you were hoping to just buy a single Trump Steak in 2007, you’d be out of luck. Instead, you could expect to spend anywhere between $199 for the lowest-tier “Classic Collection” and a whopping $999 for the highest tier “Connoisseur Collection.” If that sounds pricey, consider again that this was in 2007 — beef prices hit an all-time high in 2025, which may skew modern perceptions of just how steep the retail prices of Trump Steaks really were. As per the Bureau of Labor Statistics Inflation Calculator, those same steak collections would start at $311.30 and go up to $1,562.77 in 2026.

Of course, price was likely not the only deterrent for sales. In a TV ad from the time, Trump himself declared, “Trump Steaks are by far the best tasting, most flavorful beef you’ve ever had. Truly in a league of their own.” Some reviews, however, disagreed. Noting that the steaks were simply meat licensed through Sysco (the same company stocking Trump’s golf club menus), Gourmet Magazine called the concept of selling steaks through The Sharper Image “stupid” and called the steaks “edible, but not particularly good.”

The reviews weren’t all bad, though. In a blind taste test, The New York Post rated Trump Steaks a decent 7.5 out of 10, preferring them over a couple of other New York City steak brands. Even so, the publication noted that Trump’s beef was not worth its extremely high price point.

Trump’s retailer of choice was already struggling when Trump Steaks launched

Another factor in Trump Steaks’ downfall that can’t be ignored was the choice of retailer. Now, a good steak can be a hard sell as it is due to the cost — some major steak chains are finally making a comeback from the COVID-19 pandemic thanks to some very shrewd financial decisions. But they also all had loyal followings in years past and, importantly, are built around the sit-down steakhouse model rather than selling steaks in stores as premium brands. Trump Steaks only came flash frozen and shrink wrapped, and their retailer, The Sharper Image was then best known for selling various gadgets and lifestyle tech. Though The Sharper Image is technically still around in 2026 as a brand, its stores all closed by the end of 2008.

Trump’s preferences may also just differ from others looking to buy premium steak. As The Washington Post reported in 2017, Trump enjoys his steaks cooked well-done and served with ketchup; aka what most chefs consider to be compromising steak quality, flavor, and texture. Either way, despite various claims over the years by Trump and representatives from the Trump Organization suggesting the steaks are still around and doing well, legal records show that the Trump Steaks trademark was canceled in December 2014.

Today, the company lost approximately $60 BILLION IN MARKET VALUE.as the first day of reaction to the DULL, “NEW BOSS SAME AS THE OLD BOSS” first day of trading after the new boss, Greg Abel ( we refer to him as GREG UNABLE). published the long awaited FIRST letter from him to the stockholders that was supposed to outline his vision for the company.

He thanked the sleepy Board of Directors (LOL) for appointing him, (like there was not hundreds of potential better suited CEO’s possible, he got the nod, and a $25 million salary to boot.!!!

Why what are his accomplishments for being at Berkshire for decades ?

WHAT VISION!!!???

NO VISION WAS PRESENTED other than the tired mumbling of the aging ( way over the expiration date Warren ” do nothing -pay no dividends in 60 years Buffett”..

Greg only said that “it was a tough act to follow” the sleepy aging Mr. Buffett.

What stupid statement was that?

Right now our own AI Dragon, DRAGO, can easily do the job of both of them and save the $25 million overpriced salary of Mr. Greg Unable!

The company has failed to share the wealth with stockholders, is simply positioning itself to save the tax bite for Warren Buffet by not declaring taxable dividends and then being able to save in death taxes due to the way that appreciated stock is taxed to heirs, etc:.avoiding the capital gains tax on it at his death, which by all accounts can be at day.due to his age of 95!

Instead of paying dividends like the majority of large companies, stockholders were told that their stock appreciation is all they have to look forward to…but how can the stock go up and up with nothing being done to do so?

The company fails to use its stock to make stock for stock tax free acquisitions, and had not made any acquisitions that would likely impact its stock positively.

Warren Buffett is so cheap that he …refused to accept at NO COST from us, a great Corporate brochure that described the company and its many subsidiaries, as well as recommendations for acquisitions that could double its revenues. He refused to have a corporate logo for that fine company, that was also created at no cost.

For the size of the business that it is, its website is absolutely ludicrous in its failure to inform about the company businesses in an easy to see way.

Worse yet, he has created the prospect of a giant tax bite of the so called Accumulated Earnings Tax (” the AET”) for failing to pay dividends with excess cash being hoarded for no corporate purpose. Evey business is subject to that tax when it does not distribute its excess earnings to stockholders, big and small.

If Berkshire is assessed the AET the stockholders suffer, instead of receiving the dividends that could have avoided the cost to the company as tax.

Rebuttals and counterarguments

Berkshire will argue:

1. Insurance float requires massive liquidity. Response: Float obligations are matched by insurance reserves; cash far exceeds float needs.
2. Large acquisitions are unpredictable. Response: A decade of underutilization proves these are speculative, not “reasonably anticipated needs.”
3. Repurchases substitute for dividends. Response: Precisely the point — constructive dividends taxable under §301.

Closing policy appeal

If Berkshire’s strategy is permitted to stand unchallenged, the precedent invites other mega-caps to abandon distributions, creating a shadow pass-through regime at scale. Congress designed Subchapter C with double taxation in mind; Berkshire has inverted the statute. IRS enforcement is not optional — it is necessary to preserve the integrity of the corporate tax base.

The Dividend-Non-Paying C-Corp as Quasi-S with Pass-Through Benefits

“The Great Dividend Schism” as Moral Economy

Core Thesis

1. Dividend covenant broken. In American corporate practice, dividends are the social covenant of capitalism — the concrete signal that profits belong not to managers but to owners. Buffett’s Berkshire Hathaway has shattered this covenant.
2. Doctrinal inversion. Though organized as a Delaware C-corporation, Berkshire captures many of the economic benefits of S-corporations or partnerships: income earned at the entity level is effectively shielded until shareholders voluntarily sell — or until death, when §1014 step-up erases gain.
3. Regulatory arbitrage. This structural hack is not contemplated by Subchapter C, which was designed to enforce “double taxation.” Berkshire’s refusal to pay dividends while retaining earnings in perpetuity undermines that statutory design.

II. Delaware law presumption

Proposition 1. DGCL §170 permits dividends out of “surplus” or net profits. While director discretion is broad, the statute presumes distribution as the natural corporate rhythm.

Proposition 2. Case law — Klang v. Smith’s Food & Drug Centers, Inc., 702 A.2d 150 (Del. 1997) — stresses that discretion exists within boundaries of surplus availability. Berkshire’s $696B retained earnings (Q2 2025) proves surplus in excess.

Proposition 3. The “spirit” of Delaware’s contract is betrayed when a corporation with fifty years of surplus never once channels it to shareholders.

Structural comparison: C-Corp vs. S-Corp vs. Berkshire

Inference. Berkshire operationalizes an “S-corp without limits.”

Pass-through logic and “death erasure”

1. Step-up exploitation. Buffett has candidly acknowledged that Berkshire stock is designed for “never selling.” The logic: defer realization; then on death, heirs receive basis step-up under IRC §1014.
   • 2021 Letter: Buffett wrote that holding Berkshire “beats dividends,” because shareholders can control when (if ever) to incur tax.
   • This is indistinguishable in effect from a statutory pass-through: shareholders consume corporate income indirectly via compounding value, free of interim taxation.
2. Deferred taxation = effective exemption. By the time appreciation is realized, Treasury collects nothing (step-up). Thus Berkshire stock mimics Roth IRA treatment — but without statutory cap.

Constructive distribution doctrine

1. Courts have long looked past form to substance. If shareholders benefit indirectly, the IRS may impute dividends. Wall v. United States, 164 F.2d 462 (4th Cir. 1947).
2. Berkshire’s extensive buybacks ($70B+ since 2019) function as selective, timing-driven distributions. Under Boulware v. United States, 552 U.S. 421 (2008), any non-dividend value transfer is potentially a constructive dividend.
3. Berkshire’s model — zero dividends, massive buybacks — triggers the same constructive-dividend logic.

VI. Case law analogues

• Helvering v. Nat’l Grocery Co., 304 U.S. 282 (1938). Retention to avoid shareholder tax condemned.
• Smoot Sand & Gravel Corp. v. Comm’r, 241 F.2d 197 (4th Cir. 1957). Rejected “rainy day” justification.
• Ivan Allen Co. v. United States, 422 U.S. 617 (1975). Upheld IRS discretion to impose AET.

Application. Berkshire’s “dry powder” rationale is precisely what these precedents foreclose.

 Moral economy of dividends

1. Historical norm. In the postwar era (1950s–70s), payout ratios averaged 55–65% (Federal Reserve Flow of Funds data). Dividends were expected, not optional.
2. Cultural breach. Buffett inverted this covenant. Since 1967, Berkshire has paid no dividend. His annual letters (esp. 2012, 2017, 2023) emphasize “retaining all earnings” as policy.
3. Social consequence. Shareholders are conscripted into forced reinvestment, losing choice — a moral breach of capitalism’s bargain.

VIII. Empirical exhibit: Payout comparisons 2010–2024

Observation. Berkshire is unique: 0% payout across decades.

IRS scrutiny and regulatory gap

1. Statutory mismatch. Congress limited S-corps to 100 U.S. shareholders to prevent broad erosion of the tax base. Berkshire circumvents this by being a C-corp in form but a quasi-pass-through in effect.
2. IRS vulnerability. The Service has rarely challenged mega-caps under AET. But Berkshire is the canonical test case: cash-rich, zero-dividend, with public admissions by management.
3. Consequences for the Treasury. Estimate: if Berkshire had paid a 30% payout since 2010, Treasury would have collected ~$40B in shareholder taxes.

Quasi-S as regulatory arbitrage

Proposition 4. Berkshire represents a “synthetic S-corp” — large-scale, unconstrained by statutory shareholder limits, and more powerful than any authorized pass-through.

Proposition 5. Such arbitrage destabilizes the corporate tax base. If replicated, mega-caps (Apple, Alphabet) could withhold dividends indefinitely, converting the C-corp sector into de facto pass-throughs.

Moral hazard and systemic risk

• Copycat risk. Already, Alphabet and Amazon follow similar low-payout strategies. Berkshire legitimizes this. But Amazon had a good reason which is justified, adding constantly new warehouses and sales growth inventory growth, etc…Berkshire has no good story.
• Treasury impact. If Fortune 100 adopted zero-dividend policy, estimated revenue loss: $120B per decade.
• Market culture. Dividend discipline fades; managerial empires grow unchecked.

1. Statutory fix. Congress could require payout ratios (e.g., minimum 25%) for publicly traded C-corps with >$50B earnings.
   .

Retained earnings trajectory

Inference. Growth in retained earnings is linear, uninterrupted, and unshared.

Closing frame

The “Great Dividend Schism” is not merely a curiosity of corporate culture; it is a structural breach in the tax system. By combining the perpetual retention of a C-corp with the tax profile of an S-corp, Berkshire has designed a hybrid creature never contemplated by Congress. Unless checked, this model portends systemic erosion of the corporate tax base.

The Dividend-Non-Paying C-Corp as Quasi-S with Pass-Through Benefits

•  304 U.S. 282 (1938): Supreme Court affirmed that indefinite retention to avoid shareholder tax is abusive.
• Ivan Allen Co. v. United States, 422 U.S. 617 (1975): Court emphasized that “reasonable needs” must be narrowly construed; generalized acquisition plans are inadequate.
• Smoot Sand & Gravel Corp. v. Comm’r, 241 F.2d 197 (4th Cir. 1957): “Vague or indefinite expansion” does not justify retention.

Application. Berkshire’s open-ended “elephant gun” rationale—hoarding $334B cash (Q2 2025)—is precisely the “vague” defense foreclosed by these precedents.

Constructive dividend doctrine applies to indirect transfers.

• Wall v. United States, 164 F.2d 462 (4th Cir. 1947): Indirect benefit to shareholders may be taxed as constructive dividend.
• Boulware v. United States, 552 U.S. 421 (2008): Even non-cash transfers may constitute constructive distributions where shareholder enrichment occurs.
• Dean v. Comm’r, 187 F.2d 1019 (3d Cir. 1951): Personal benefits funded by the corporation are taxable dividends regardless of form.

Application. Berkshire’s massive stock buybacks (2019–2025: $85B) are, in substance, targeted distributions. Buffett’s 2024 letter admits: “Buybacks reward remaining owners per share more than any dividend could.” This is an admission of constructive dividend effect.

 Admissions by Buffett (Shareholder Letters 2023–2025)

Exhibit A – 2023 Letter

• Buffett: “We reinvest everything; our shareholders prefer control of when they realize gains.”
• Legal implication: Explicit recognition of tax deferral scheme.

Exhibit B – 2024 Letter

• Buffett: “Cash is a perpetual option, a war chest that compounds without the friction of dividend taxes.”
• Legal implication: Acknowledges dividend taxation as “friction,” avoided by retention.

Exhibit C – 2025 Letter (May)

• Buffett: “Berkshire has returned more via buybacks than any dividend policy ever could.”
• Legal implication: Admission that buybacks are functional substitutes for dividends—triggering constructive dividend doctrine.

Comparative EDGAR Analysis

Pulling 10-Ks (2015–2024) via SEC EDGAR:

Inference. Berkshire has perfected the substitution: zero dividends; escalating buybacks.

Moral Economy Deepened

1. Dividends as covenant. 19th c. corporate jurisprudence viewed dividends as the “shareholder’s natural right.” See Cook on Corporations (1894).
2. Buffett’s rupture. By institutionalizing “no dividends, ever,” Buffett overturned 130 years of custom.
3. Economic impact. Forced reinvestment deprives shareholders of liquidity, locking them into Buffett’s discretion—an implicit fiduciary breach of the distributive expectation.

Empirical Counterpoint – Peer Payout Ratios

Observation. Even capital-intensive peers distribute. Berkshire alone abstains.

Quasi-S as Structural Hack

Statutory S-corp restrictions (≤100 shareholders, U.S.-only, single class stock) were designed to cabin tax avoidance. Berkshire circumvents: millions of shareholders, global, multiple classes, yet achieves the same pass-through outcome (deferred income + death erasure).

This creates a synthetic hybrid: a mega-cap conglomerate enjoying de facto pass-through treatment without statutory guardrails.

Consequences for Treasury

Estimate.

• Berkshire’s cumulative retained earnings since 2010: ~$550B.
• If 30% payout → $165B distributed.
• If taxed at 20% capital gains rate → $33B revenue lost.
• With compounding → >$40B total foregone.
  Treasury Reg. §1.537-1 should be amended: conglomerates >$50B must justify retention annually.
  • Burden shifts to taxpayer to prove “reasonable need.”

1. Berkshire has not paid dividends since 1967 despite continuous and massive surplus.
2. Retained earnings exceed $696B as of 2024; cash reserves $334B.
3. Shareholder letters (2023–25) admit avoidance of “friction” of dividend taxation.
4. Buybacks exceeding $85B (2019–25) function as constructive dividends.

 Closing Argument

Berkshire Hathaway exemplifies the quasi-S paradox:

• Legally a C-corp, but economically a pass-through.
• Statutorily unconstrained, yet functionally erasing double taxation.
• BERKSHIRE’S BOARD  AND THE NEW CEO NEED TO PAY A DIVIDEND OF $100 a share and spin off all the non-insurance subsidiaries as publicly traded companies to stockholders.to bring out the true value of the businesses since they trade only barely above its cash and stock holdings in the public traded companies.

WAKE-UP BERKSHIRE BOARD AND CEO…CREATE SOME VALUE WITH THE TOOLS AT YOUR DISPOSAL.