CLAIM: Reports that President Joe Biden avoided over $500,000 in taxes and could owe back taxes has been “debunked.”
VERDICT: FALSE. The Bidens avoided over $500,000 in payroll taxes by filing as an S-corp; no one has debunked that.
White House press secretary Jen Psaki faced a question from a reporter Tuesday in the briefing room about why Biden, who constantly claims the wealthy have to pay their “fair share,” avoided over $500,000 in taxes, and whether he owes back taxes.
Psaki attempted to dodge the question by claiming that such reports had been “debunked”; she provided no references.
In 2019, the Wall Street Journal reported that Joe Biden and his wife, Dr. Jill Biden, avoided more than $500,000 in taxes by reporting income as an S corporation rather than as individual taxpayers, thereby dodging Medicare and Obamacare taxes.
The Journal, which studied the Bidens’ tax returns, noted:
Mr. Biden and his wife, Dr. Jill Biden, routed their book and speech income through S corporations, according to tax returns the couple released this week. They paid income taxes on those profits, but the strategy let the couple avoid the 3.8% self-employment tax they would have paid had they been compensated directly instead of through the S corporations.
The tax savings were as much as $500,000, compared to what the Bidens would have owed if paid directly or if the Obama proposal had become law.
“There’s no reason for these to be in an S corp—none, other than to save on self-employment tax,” said Tony Nitti, an accountant at RubinBrown LLP who reviewed the returns.
Mr. Biden has decried the proliferation of such loopholes since Ronald Reagan’s presidency and said the tax revenue could be used, in part, to help pay for initiatives to provide free community-college tuition or to fight climate change.
Far from being “debunked,” the Journal‘s reporting on the Bidens’ taxes was widely accepted as accurate. The Journal referred to the Bidens’ tax avoidance scheme again in an op-ed published in 2020, “How the Bidens Dodged the Payroll Tax.”
In 2021, the nonpartisan Congressional Research Service (CRS), which works for Congress, sent a memorandum too Rep. Jim Banks (R-IN), which was first reported by the New York Post, suggesting that taxpayers who used the Bidens’ method could owe back taxes to the Internal Revenue Service.
The CRS report did not mention Biden specifically, but the memorandum was never “debunked.”
Psaki noted that Biden had released several years of his tax returns; President Donald Trump declined to release his own, saying they were under audit.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.