Biden under fire over tax avoidance scheme
Republicans say a new non-partisan report indicates President Joe Biden improperly avoided paying Medicare taxes before he took office – raising eyebrows and the possibility that he owes as much as $500,000 in back taxes.
Mr Biden is leading a Democratic push for a $3.5 trillion ($4.8 trillion) Bill to subsidise childcare, education and health care by targeting tax avoidance and raising rates so the rich “pay their fair share”.
A House ways and means committee draft of the Bill would end the accounting trick apparently exploited by the President and boost IRS funding for audits – but the new report, drafted by the Congressional Research Service, suggests he owes taxes under current rules, according to the congressman who requested it.
“Joe Biden wants to raise taxes by $2.1 trillion while claiming the rich need to pay their ‘fair share.’ But in 2017, multi-millionaire Joe Biden skirted his payroll taxes – the very taxes that fund Medicare and Obamacare,” said Republican Jim Banks, chairman of the Republican Study Committee.
“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,” Mr Banks said. “Every American should know about Joe Biden’s tax hypocrisy.”
He said the report showed the President improperly used “S corporations” to avoid paying Medicare tax on speaking fees and book sales.
Mr Biden and first lady Jill Biden routed more than $13m through S corporations and counted less than $800,000 of it as salary eligible for the Medicare tax, the Wall Street Journal reported.
The CRS report does not name Mr Biden but analyses cases in which the IRS won a judgment against taxpayers who paid themselves low salaries from S corporations and counted most of the revenue as “distributions” exempt from the Medicare tax.
“Courts have agreed with the IRS that shareholder employees are subject to employment taxes when shareholders take distributions, dividends or other forms of compensation in lieu of reasonable compensation,” the report says.
The White House said this year the Biden S corporations were dormant, meaning the IRS would not review them.