Sen. Rick Scott put out an ad calling Vice President Joe Biden a “tax cheat” after Biden made a veiled dig at him during the State of the Union address. Biden was first looked at in 2019 because, on his tax returns for 2017 and 2018, he used what one nonpartisan expert called an “aggressive” but not illegal way to avoid paying a Medicare tax cheat.
Rep. Beth Van Duyne, R-Texas, looked confused in the House chamber as Vice President Joe Biden attacked Republicans in his State of the Union speech. “I don’t know what his motivation was, but I’m sick of his lies,” she said. (Photo: https://www.nbcnews.com/)
The White House is using a new argument to defend that tax move, which it says was approved by the IRS, but some tax experts are still not convinced.
Scott called Biden a “tax cheat” in an ad after Joe Biden made fun of Republicans during the State of the Union by saying, “Some Republicans want Medicare and Social Security to end instead of making the rich pay their fair share.” I’m not saying it’s a majority.”
Some Republicans, like Rep. Marjorie Taylor Greene, yelled “liar” when she said that line. As we wrote, the president has exaggerated how much support Republicans have for a plan from Scott that says, “All federal laws expire in five years.”
If Congress thinks a law is worth keeping, it can pass it again.” Scott, who was head of the National Republican Senatorial Committee, has said that he wants to “fix” the programs but not get rid of them.
Scott said in a tweet the day after the State of the Union that Joe Biden had lied about Republicans wanting to cut Social Security and Medicare. However, Biden had only said that “some Republicans” want to end the programs, which is what Scott had proposed.
Joe Biden tried to close loophole.
No matter how you describe the Joe Biden plan, it’s important to remember, as the Wall Street Journal did, that the Obama administration tried, but failed, to close this tax “loophole.”
Setting up S corporations to avoid paying payroll taxes became known as the “Gingrich/Edwards” tax cheat loophole because it was used by Newt Gingrich, a former speaker of the House and GOP presidential candidate, and John Edwards, before he became a senator and the Democratic vice presidential nominee.
In his 2015 budget, President Barack Obama asked Congress to close the so-called loophole. However, Congress did not agree to do so.
Even the Biden administration tried to shut it down. Joe Biden call to close the so-called “S corporation loophole” for people with incomes over $400,000 was in the first version of the Build Back Better plan that was backed by the House. But that wasn’t in the law that was finally passed, which was much less strict.
Some people might think it’s hypocritical for Biden to use something that is technically legal.
Robert Willens, a tax expert and adjunct professor at Columbia University’s Graduate School of Business, said in an email that what the Bidens did is “a common way for shareholders of ‘S’ corporations to reduce their Medicare and payroll tax liabilities. This is done by reporting an unreasonably low amount of pay for the services they provided to the “S” corporation.”
Willens told us that the I.R.S. has had a lot of success going after taxpayers who use this strategy and, as far as I know, has never lost a case where it was said that the pay was too low.
“Don’t you think that a business that made about $10 million, where capital wasn’t a big part of making money, and where the success of the corporation was due to the personal services of the shareholders, should pay its shareholders/employees more than the President’s “S” corporation did?
In a case like this, what is fair pay is a matter of fact that the IRS or maybe a judge or jury will decide], but it seems to be a lot more than the amount that President Biden said was fair pay.
Willens said, “I wouldn’t call him a “tax cheat.” “He was just using a common trick, and he might not have even been aware of the benefits he could get from lying about his pay. This is just a normal, common way to save money on taxes. He might have thought, in good faith, that the money he said he made was fair.
Still, the Joe Biden campaign defended the tax returns in 2019, telling the Wall Street Journal, “The Bidens’ salaries are fair and were calculated in good faith, given the nature of the entities and the services they provided.”
Bottom Line
Scott said that President Joe Biden “tax cheat.” The Bidens’ 2017 and 2018 tax returns showed that they used S corporations to avoid paying up to $500,000 in taxes on a portion of their income. Some experts think that this is a “aggressive” way to legally avoid paying taxes.
But experts agreed that this was not cheating and was not even against the law. It has been used for a long time by high-income taxpayers, like politicians from both parties. When the IRS looked into a complaint about the Joe Biden tax return, it doesn’t look like the agency did anything.
We judge this to be False.
Read More:
Biden: Student Loan Program and Its Current Status
Republicans Interrupt Vice President Biden’s State of the Union address at Trump Order
President Biden’s Student Loan Forgiveness Plan Blocked by Arizonan Democratic Attorney
