Former Vice President Joe Biden saved half-a-million dollars on taxes using a loophole that former President Barack Obama attempted to abolish.
Biden and his wife, Jill Biden, channeled money from book sales and speeches through S corporations rather than claiming to be self-employed, skirting the 3.8% tax, according to tax records released this week and reviewed by the Wall Street Journal. The Bidens saved up to $500,000 with the shuffle.
“There’s no reason for these to be in an S corp — none, other than to save on self-employment tax,” RubinBrown LLP accountant Tony Nitti said after reviewing the tax returns.
Obama proposed cutting the “Gingrich/Edwards” tax loophole, named after former House Speaker Newt Gingrich and former Sen. John Edwards, in the 2015 White House budget proposal.
An S corporation can protect someone from paying payroll taxes into Social Security and Medicare on most of the money that travels through the entity. The S corporation’s owner is still liable for paying distribution taxes.
Biden is the leading contender to challenge President Trump in 2020. He has campaigned on what he says is a fairer tax system, making the wealthy pay more and eliminating tax loopholes.
“We don’t have to punish anybody, including the rich. But everybody should start paying their fair share a little bit. When I’m president, we’re going to have a fairer tax code,” Biden said in a campaign speech last month.
