‘Multimillionaire’ Biden’s use of ‘S corporations’ draws scrutiny by Republican who sees hypocrisy
Rep. Jim Banks, the chair of the Republican Study Committee, lashed out at Biden for calling on the country’s richest to pay their 'fair share' after S corp revelation
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President Biden and first lady Jill Biden saved up to $500,000 by routing $13 million they received in book sales and speeches in 2017 and 2018 through S corporations, according to a Congressional Research Service report, which drew criticism by at least one Republican.
It is not uncommon for wealthy individuals and politicians to try and preserve their income by using what some call tax loopholes, but Republicans have called out what they see as hypocrisy from the president who came out in support of proposals to tax billionaires. On Friday, the president told reporters, "I just think it’s about just paying your fair share, for Lord’s sake."
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Rep. Jim Banks, the chair of the Republican Study Committee, lashed out at Biden for calling on the country’s richest to pay their "fair share" to help finance his $2.1 trillion infrastructure plan.
He said in 2017, "multi-millionaire Joe Biden skirted his payroll taxes—the very taxes that fund Medicare and Obamacare. According to the criteria CRS provided to my office, he owes the IRS and the American people hundreds of thousands of dollars in back taxes. Every American should know about Joe Biden’s hypocrisy."
Banks said the report indicated that Biden improperly used "S corporations" while he and his wife raked in over $13 million on speaking fees and book sales in 2017 and 2018, but counted less than $800,000 of it as a salary that could be taxed for Medicare.
The CRS report may be new, but the Wall Street Journal reported on Biden’s use of the "tax-code loophole [President] Obama tried to plug."
Tony Nitti, an accountant at RubinBrown LLP who reviewed the returns, told the paper in its 2019 report that there is "no reason for these to be in an S corp—none, other than to save on self-employment tax."
The Biden campaign told the paper at the time that the couple’s effective federal tax rate in 2017 and 2018 exceeded 33%. The campaign said the Bidens are committed to ensure "all Americans pay their fair share." The White House did not immediately respond to an after-hours email Sunday night from Fox Business.
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The White House earlier this week pointed to a campaign statement that said the salaries "are reasonable and were determined in good faith, considering the nature of the entities and the services they performed," the statement said, calling the use of the corporations a "common method for taxpayers who have outside sources of income to consolidate their earnings and expenses."
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The Journal said that S-corp owners have the ability to avoid paying the 32.8% tax on their profits "as long as they pay themselves ‘reasonable compensation,’" which, of course, is difficult to define.
Fox Business' Michael Lee contributed to this report