Warren Buffett said he expects the US government to increase taxes to tackle widening fiscal deficits rather than reduce spending.

"I think higher taxes are likely," he said on Saturday at Berkshire Hathaway's annual shareholder meeting in Omaha.

"They may decide that some day they don’t want the fiscal deficit to be this large because that has some important consequences. So they may not want to decrease spending and they may decide they’ll take a larger percentage of what we own, and we’ll pay it," he said.

The Congressional Budget Office has estimated in its latest long-term budget projections federal deficits will rise to 8.5 percent of gross domestic product in fiscal 2054 from 5.5 percent in fiscal 2024. US budget deficits are expected to deteriorate if tax cuts introduced in 2017 are renewed next year. (Reuters)