Democrats on the House Ways and Means Committee are refusing to request an Internal Revenue Service audit of former vice president Joe Biden’s tax returns following the release of the 2020 Democratic front-runner’s financial documents that show Biden used a tax loophole to avoid paying as much as $500,000 in taxes.
For the past two years since leaving the Obama administration, Biden has structured his finances to take advantage of a tax loophole that kept the Bidens from paying thousands of dollars in additional taxes to fund the administration’s signature health-care law, the Affordable Care Act, popularly known as Obamacare. Several experts who analyzed Biden’s released financial documents for the Wall Street Journal have called the arrangement legally questionable.
The office of the committee’s chairman, U.S. Rep. Richard Neal (D-Mass.), which has filed a lawsuit against the IRS and the Treasury Department for the release of President Donald Trump’s tax returns, refused several requests from The Federalist to comment or to call for an investigation into Biden’s returns.
Released financial records show that the Bidens raked in more than $15 million over the last two years from speeches, book sales, and Joe’s work as a professor at the University of Pennsylvania. Much of that revenue was funneled through two S corporations set up to circumvent paying taxes that were created to fund Medicare and Obamacare, despite the former vice president’s rhetoric on the 2020 campaign trail promising to protect Obamacare and unveiling a new plan dubbed the “Affordable Care Act 2.0.”
While the Bidens still paid all of their federal taxes on their salary income, they avoided paying self-employment taxes on millions of dollars recorded as profits from the two S corporations, reducing their tax bill by an estimated $500,000. An analysis from tax experts in the Wall Street Journal called the Biden’s use the tax shelters a “pretty aggressive” and “cut and dried” abuse of the system considering the low salaries the Bidens gave themselves.
Obamacare pushed the self-employment tax rate from 2.9 percent to 3.8 percent for individuals whose incomes are above $200,000 and for families whose incomes rise over $250,000. In routing money made through speeches and book sales through the two S corporations, however, the Bidens were able to collect a majority of the income as profits that were exempt from the additional Obamacare self-employment tax.
