Joe Biden and Jill Biden released their tax returns again this year, and used the opportunity to claim the disclosure shows his integrity. However, an analysis of the president and first lady’s returns indicate they may be hypocritically abusing tax loopholes.
The first couple used a common method to avoid payroll taxes that pay for Social Security and Medicare, and may have underpaid their taxes.
When Joe Biden left the vice presidency in 2017, he and Jill began channeling their book and speech income and fees through a pair of subchapter S corporations. That move allowed them to characterize more than $13 million in income as corporate profits rather than as personal wages or income. That allowed them to avoid over $500,000 in payroll taxes.
The Biden administration has proposed removing the payroll tax loophole since Joe Biden assumed office. The Treasury Department explicitly said the procedure allows high-income individuals to “avoid paying their fair share of taxes.”
Congressional Democrats included language removing the loophole in their proposed $5 trillion Build Back Better spending bonanza.
Several tax experts think the Bidens may have abused the already-generous loophole. Biden paid himself such a low salary that he may have strayed outside IRS guidelines. In 2017, Biden paid himself about $150,000, fully 37% less than the $230,700 salary he received as vice president.
As Biden pushed his declared income down, he was able to classify more income as corporate profits that are not subject to the payroll taxes. The IRS Statistics of Income show that in 2017, corporations with income similar to the two owned by the Bidens paid executive salaries averaging 33.6% of net income. Biden’s salary amounted to only 1.51% of his corporation’s net income in 2017.
The implication is that Biden intentionally underpaid himself to avoid paying payroll taxes.
Christopher Jacobs with The Federalist filed IRS complaints against the Bidens and their accountant, Walter Deyhle. The allegation involving Deyhle has to do with the obligations that accountants have to perform an analysis to determine if tax returns are consistent with IRS statistics and acceptable business standards.
Jacobs also argues that if Republicans regain control of Congress after this year’s midterm elections, they should investigate Deyhle’s records and the circumstances surrounding the Biden returns. Americans deserve a federal tax system that treats every person earning income equally under the law.