Biden calls on rich to ‘step up and pay’ ‘fair share’ in taxes

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Biden calls on rich to 'step up and pay' 'fair share' in taxes

President Biden on Friday urged wealthy Americans to “step up and pay” their “fair share” in taxes — despite a new report that showed Biden may owe up to $500,000 in federal taxes.

Democrats led by Biden propose paying for a pending $3.5 trillion social spending bill through an IRS crackdown on tax cheats and by raising taxes on higher incomes and businesses.

“We have to rehire some IRS agents… not to try to make people pay something they don’t owe — just to say, ‘Hey, step up. Step up and pay like everybody else does’,” Biden said at the White House.

“Look, I really mean this. If you look at my whole career — I come from the corporate state of America — I just think it’s about just paying your fair share for lord’s sake.”

Biden avoided paying Medicare taxes on speech and book-sale income in 2017 and 2018 by using a dubious accounting tactic employed by wealthy people to avoid paying for federal health programs.

Biden and first lady Jill Biden routed more than $13 million through “S corporations” and counted less than $800,000 of it as salary eligible for the Medicare tax — exempting the rest from what would have been a 3.8 percent rate. He should have paid the tax on the share of this income that was earned as a result of his own labor, experts say.

President Joe Biden
Biden avoided paying Medicare taxes on speech and book-sale income in 2017 and 2018.
AP Photo/Patrick Semansky

The question of whether Biden improperly avoided paying taxes resurfaced when Rep. Jim Banks (R-Ind.) requested a report from the Congressional Research Service on S corporation tax obligations. Banks’ office provided a copy of the report to The Post, arguing that it shows Biden owes the IRS back taxes.

“Joe Biden wants to raise taxes by $2.1 trillion while claiming the rich need to pay their ‘fair share.’ But in 2017, multi-millionaire Joe Biden skirted his payroll taxes — the very taxes that fund Medicare and Obamacare,” Banks said.

“According to the criteria CRS provided to my office, he owes the IRS and the American people hundreds of thousands of dollars in back taxes,” Banks said. “Every American should know about Joe Biden’s tax hypocrisy.”

Rep. Jim Banks
Rep. Jim Banks criticized the “hypocrisy” of Biden’s tax stance.
Tom Williams/CQ-Roll Call, Inc via Getty Images

Although Republicans are using the issue to highlight alleged hypocrisy by the president, passage of the Democrats’ massive new bill might be to Biden’s personal disadvantage as well. A House Ways and Means Committee draft of the bill would end the accounting trick and dramatically boost IRS funding for audits, potentially forcing Biden to settle up with tax inspectors.

Biden, who branded himself “Middle Class Joe,” frequently calls on upper-income people to pay their “fair share,” saying that aside from tax hikes, the rich often avoid paying existing taxes that they owe. He often uses that appeal to the middle class as he seeks to unite a diverse Democratic coalition in Congress to boost spending on childcare, education and health care.

“Right now, the top 1 percent, for example, evade an estimated $160 billion in taxes that they owe each year. Not new taxes, taxes that they owe,” Biden said last week. “That isn’t about raising their taxes. It’s about the super-wealthy finally beginning to pay what they owe — what the existing tax code calls for — just like hardworking Americans do all over this country every Tax Day.”

U.S. President Joe Biden
Corporate tax expert Bob Willens said that “the case can easily be made” that Biden owes back taxes.
REUTERS/Evelyn Hockstein

Tax law experts told The Post that Biden’s tax-avoidance strategy is so common that the IRS doesn’t have the resources to haul into court every S corporation owner who dubiously underestimates their “salary” to avoid the Medicare tax.

John Bogdanski, a former member of the IRS Commissioner’s Advisory Group and a professor at Lewis & Clark law school, said, “There are millions — literally millions — of S corporations. So there might be a half a million S corporations that are playing this game. And the IRS doesn’t have anywhere near enough of a budget to bring a half a million cases every year.”

Corporate tax expert Bob Willens, an adjunct professor at Columbia University’s business school, said that “in my view, the case can easily be made” that Biden owes back taxes. “Whether the IRS would be willing to make that case, however, is questionable given the identity of the shareholder,” he added.

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