Democratic presidential candidate Joe Biden used a tax loophole that the Obama administration tried and failed to close, substantially lowering his tax bill.
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.
“As demonstrated by their effective federal tax rate in 2017 and 2018—which exceeded 33%—the Bidens are committed to ensuring that all Americans pay their fair share,” the Biden campaign said in a statement Wednesday.
The technique is known in tax circles as the Gingrich-Edwards loophole—for former presidential candidates Newt Gingrich, a Republican, and John Edwards, a Democrat—whose tax strategies were scrutinized and drew calls for policy changes years ago. Other prominent politicians, including former President Barack Obama and fellow Democrat Hillary Clinton, as well as current contenders for the 2020 Democratic nomination Sens. Elizabeth Warren and Bernie Sanders, received their book or speech income differently and paid self-employment taxes.
Unlike his Democratic rivals and predecessors in both parties, Mr. Trump has refused to release his tax returns, and his administration is fighting House Democrats’ attempt to use their statutory authority to obtain them. Democratic presidential candidates have released their tax returns and welcomed criticism to draw a contrast with Mr. Trump.
Mr. Biden, who was vice president from 2009 to 2017, has led the Democratic field in polls since entering the race. He is campaigning on making high-income Americans pay more in taxes and on closing tax loopholes that benefit the wealthy.
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.
“We don’t have to punish anybody, including the rich. But everybody should start paying their fair share a little bit. When I’m president, we’re going to have a fairer tax code,” Mr. Biden said last month during a speech in Davenport, Iowa.
Biden not only doesn’t generate the emotional response Hillary did, his nomination would constitute the Democrats broadcasting to the world that they have not (yet) embraced socialism, and they have not (yet) fully-embraced the woke culture of the Online Left. So how would the Republicans generate the kind of Flight 93 urgency that helped Trump (very narrowly) beat Hillary? I’m not sure. In fact, if Joe Biden can win his way through the primaries, he’s almost lab-engineered to beat Trump. He doesn’t cause Republican panic, he has the potential to connect with white working-class voters in a way that Hillary couldn’t in 2016, and he has a potential to connect better with black voters than Hillary did.
.. Biden’s appeal for 2020 is that he comes across as a warm, blue-collar, touchy-feely paternal figure, sometimes talking too much, sometimes saying the wrong thing, like calling parts of Asia “the Orient.” At 76, he’s been through it all, and then some.
.. But as he prepares to present himself as a seasoned patriarch who can lead the country in a smooth, classy way, unlike the current occupant of the Oval, he must grapple with the painful reality of his life as the head of a family that has messily spilled into the tabloids, a brood that is still brooding and suffering the reverberations of 46-year-old Beau Biden’s death from brain cancer in 2015.
.. Grief aside, Barack Obama and his coterie of top aides did not think the vice president was the right person to protect and extend the Obama legacy.
But there was a school of thought that, given the monumental effort it took to dismantle the Clinton machine, it would be better to move on from Hillary. Some Biden allies felt that his powerful story of rising above personal loss — his first wife and infant daughter died in a car crash just before Christmas in 1972 — could be a superpower to connect with suffering Americans and that such a raw quest would be good therapy for him.
But Obama felt differently. He could make it up to Hillary and feminist activists for hopscotching over the New York senator who might have blown out the glass ceiling in 2008.
Also, Obama and his strategists thought Biden had hit his ceiling, had his day, had too many gaffes. Hillary, Obama thought, was an impressive and loyal cabinet member who was great in meetings.
I didn’t vote for Clinton because of this.
- In 1980 Poppy Bush became Vice President.
- In 1988 Poppy became President
- In 1992 Bill Clinton became President.
- In 2000 George W Bush (junior) became President.
- In 2008 Hillary ran for President.
If if she had won, we would have consolidated power into just two families hands for effectively 36 years. Only this Obama kid popped up and wrecked that plan with the help of the Democratic Base.
- In 2016, the new Duopoly fixed the race by running both Jeb Bush and Hillary Clinton. Both announced as “front runner” before they had officially announced.
This time the Republicans stepped in and elected an orange game show host to ruin the plan. He was so bad by Election Day that I actually voted for Clinton, even though I said I wouldn’t.
We don’t have Royals in America. This is what hurt Romney too, he’s a legacy candidate as well but not a part of the Bush/Clinton dynamic.
The Clintons and Bushes have the same Trade policies, same monetary policies, similar regulatory goals. Bill and Poppy were even closer on economic policy, military policy, science policy and legislative agendas. Dubya was a deviation but in all of the worst directions.
Bill and Poppy were competent Presidents. Hillary would be profoundly competent and I suspect Jeb would too.
Heck Obama was fairly close to Poppy’s policy structures. Most competent Presidents will be.
This isn’t about policy, it’s about legacy and aristocracy.
Hillary is a brilliant policy wonk. A type A over achiever who is smart, responsive and hyper qualified. She’s also as slippery as her husband, inherently occluded in speech, perpetually on defense and 25 years of that coupled with operating at the height of political power has made her unapproachable . She’s a bad campaigner, who fails to connect at deeply emotional levels.
I am not being ageist. I’m being realistic. Bernie won’t run because he’s too old. Biden won’t run because he’s too old. McCain could’ve run but he knew he was too old. 75 is pushing the human bodies limits for taking on an office that visibly drains its occupants like there is a vampire in the Resolute Desk. Any 3 of these guys could’ve won but they had a legacy candidate in the way.
The Democrats need some new, out front faces. Pelosi, Feinstein, Shumer, Boxer and the Clinton’s have had their time in the sun.
.. The working class doesn’t like these entrenched politicians. Witness Trump. They pulled Obama ahead of Hillary in 08 because they want new and different.
.. Trump is a mess but he’s not such a mess that the working class is going to go back to the old aristocracy. Hillary looks better by comparison but that’s not the same as better.
If the Dems want a legacy, draft one of the Kennedy grandkids. It’s been satisfactorily long enough for them to run without the taint of legacy. The Republicans can maybe draft a Hoover. They’ve had enough lately.