On Monday, the delayed due date for filing federal taxes for the last calendar year, the White House made a theatrical show of releasing President Biden’s 2020 tax returns. In so doing, the new administration wanted to show a contrast with Biden’s predecessor, Donald Trump, who did not release his tax returns.
But while the White House emphasized the release of Biden’s returns, it does not want reporters to scrutinize the content of those returns, because doing so would highlight a pattern of hypocritical behavior by the current president and his family. To wit: For the fourth year running, the First Family used a questionable tax loophole to avoid paying more than $500,000 in Medicare and Obamacare taxes — a loophole that the Biden administration now claims it wants to close.
Corporate Profits vs. Wages
The loophole comes because Joe Biden and his wife Jill categorized much of their book and speech revenue as profits from two corporations they created, rather than as taxable wages. Under current law, corporate profits are not subject to payroll taxes, meaning the Bidens avoided paying 3.8 percent in taxes — a 2.9 percent levy that funds Medicare, and a 0.9 percent tax created by Section 9015 of Obamacare that funds that law — on every dollar they categorized as corporate profits rather than wages.
The Bidens exploited this loophole most aggressively in 2017 and 2018 when Joe Biden earned millions through a reported $8 million book advance and various speaking engagements. Because Biden spent 2019 and 2020 running for president, the couple’s income — and therefore their ability to use this loophole — dropped. In 2020, Joe Biden reported no income at all from his corporation, and therefore could not utilize this loophole to reduce his tax bill.
But Jill Biden continued to use this loophole in 2020 on earnings from her corporation. As the chart below shows, the Bidens avoided a total of $516,992 in taxes over the past four years:
|2017 Return||2018 Return||2019 Return||2020 Return|
|Total Wages Paid||$245,833||$500,000||$308,932||$200,000|
|Total Corporate Profits||$10,048,739||$3,236,764||$228,703||$90,854|
|Medicare Taxes Avoided (2.9% of Corporate Profits)||$291,413||$93,866||$6,632||$2,635|
|Obamacare Taxes Avoided (0.9% of Corporate Profits)||$90,439||$29,131||$2,058||$818|
|Total Taxes Avoided||$381,852||$122,997||$8,691||$3,452|