The tables have turned as Joe Biden gets dragged into the mud of tax evasion, days after the New York Times ran a story on President Trump’s personal income taxes.
According to an article in The Wall Street Journal in August, Joe Biden and his wife, Jill, apparently set-up S Corporations in Delaware to avoid paying millions of Social Security and Medicare taxes.
The couple declared only $750,000 from the $13.3 million income through speaking fees and book royalties in 2017-2018.
According to CNBC, a more considerable sum, about 94% of $13.3 million, went under corporations. The process prevented the money from being subjected to 15.3 percent combined Social Security and Medicare tax rates.
The Internal Revenue Service (IRS) mandates S corporations to pay “reasonable compensation” to employee shareholders before giving out non-wage distributions. The nature of the business dictates income and distribution to an employee shareholder.
“But to the extent, gross receipts are generated by the shareholder’s personal services, then payments to the shareholder-employee should be classified as wages that are subject to employment taxes [Social Security and Medicare],” IRS guidance reads.
Biden’s case is classified as such.
A larger sum of the couple’s money from the S corporations should be in the form of income, subject to respective employment taxes.
Ryan Grim, a Democrat journalist with The Intercept, also highlighted the loophole. In last year’s Democratic primary race, Grim pointed out Biden’s Delaware corporate law to cover their income and subsequently evade taxes.
The Biden camp was quick to ride on the New York Times article at odds with the president, yet, their candidate is hiding a skeleton in his closet.