President Joe Biden is a strong advocate of the rich paying their fair share of taxes. It turns out that he might have not been paying his fair share.
A new non-partisan report said that the President avoided paying Medicare taxes before he assumed the Presidency. All in all, Biden could owe the Internal Revenue Service as much as $500,000 in back taxes.
‘Fair Share’ Advocate Avoided Paying Taxes
Earlier this year, Biden presented a $3.5 trillion spending program that promises to subsidize child care, education, and health care. He wants the top-earning Americans to pay more taxes to fund the spending programs. To do so, he called on the wealthiest Americans to “pay their fair share.”
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However, Biden might have been using the same accounting methods these wealthy Americans are using. A new Congressional Research Service report suggests that Biden might owe back taxes under current accounting rules.
Representative Jim Banks (R-IN) said that “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,” he said. Banks is the chairman of the conservative Republican Study Committee.
Biden’s Tax Hypocrisy
Banks added that Biden improperly used loopholes to avoid paying taxes. “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 tax hypocrisy,” he said.
According to the report, Biden improperly used “S corporations” in 2017 and 2018 to avoid paying Medicare tax on speaking fees and book sales. Instead, Biden and first lady Jill Biden routed more than $13 million through S corporations.
As a result, they counted less than $800,000 of the total as salary eligible for the Medicare tax. This exempted them from a potential 3.8% tax rate.
The CRS report didn’t name Biden. However, it did analyze cases where the IRS won a judgment against taxpayers. They paid themselves notable low salaries from S corporations.
Afterward, they considered 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 report also documents additional samples. It included a case involving an accountant named David Watson who piped about $200,000 per year of his firm’s revenue through an S corporation.
Meanwhile, Watson declared just $24,000 of it as a taxable salary. Courts determined he dramatically underpaid his taxes. In addition, the CRS report notes that presidential tax returns are subject to automatic audit only for years when a president is in office.
The White House already said this year that the Biden S corporations are presently dormant. This means that the IRS won’t automatically review their use.
Biden Should Audit His Taxes First
Chris Jacobs is a GOP veteran who closely monitors the situation. He asked how Biden can demand rich Americans to pay their fair share he himself won’t? “Joe Biden wants to expand the IRS’s funding and authority, so they can audit more Americans.
Given that the liberal Tax Policy Center and the nonpartisan Congressional Research Service both have raised questions about the way Biden handled his taxes, why doesn’t he ask for his own taxes to get audited first,” he asked,
Biden doesn’t really believe in expanding programs like Medicare and Obamacare,” he noted. That’s because the president thought that “buying a second multi-million dollar mansion and renting a third was more important than helping to fund those laws.”
Hard For the IRS to Police
David Gamage is a tax law professor at Indiana University Bloomington that commented on the practice. “The general view among tax experts is that it’s quite easy for taxpayers to get away with this form of tax planning to the point of it being very abusive,” he observed.
Gamage also said that the IRS may find it hard to investigate given the number of people practicing this. “This is not the sort of tax planning that should be going on as a matter of tax policy, but it’s very hard for the IRS to police,” Gamage said.
“I would hope that increased attention to this issue, whether that be through a focus on a President Biden using this form of tax planning or more generally, would increase the case for reform.
I think the case for both increased IRS funding and for substantive law reform in this area is overwhelmingly strong,” he added.
Meanwhile, the White House remains mum on the issue. Previously, the Biden campaign said that “the salaries earned by the Bidens are reasonable and were determined in good faith.”
Watch the Fox Business News video reporting that President Joe Biden used tax shelters to avoid paying taxes on $13M over 3 years:
What do you think about Biden avoiding paying his fair share? Will you support his social programs knowing people like him will just avoid paying taxes that go to funding this?
Tell us what you think about taxpayers paying their fair share. Leave your comments below.
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