Biden Releases His 2019 Taxes, and Most of his Income Came Through Tax-Avoiding S Corporations He Set Up

Full disclosure: I own an S corporation. For most of the past 20 years, I’ve taken my income as a distribution through my S corporation rather than taking a salary, because it saved me money on taxes.

I started taking a salary earlier this year for reasons too complicated to get into, especially since this column isn’t about me. But I tell you this up front so you’ll understand that I know about S corporations. They’re perfectly legal and there’s nothing wrong with them whatsoever.

But that is also true of Donald Trump’s tax strategies, which isn’t stopping the media from going into full scandal mode for how he’s employed those strategies.

Also, it’s one thing to own an S corporation and actually do the work of the corporation.

Joe Biden earned nearly $1 million in 2019 funneling money through two S corporations, which he calls CelticCapri Corp. and Giacoppa Corp. He paid nearly $300,000 in taxes on those earnings, which is fine and good, but I’m more interested in the income.

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Last year The Intercept, which is a left-wing publication that’s excellent in its analysis of the news it covers, explained how Biden does all this:

The Bidens have used their home state’s financial privacy laws to shield his income from public view, by setting up two tax- and transparency-avoidance vehicles known as S corporations. He and his wife Jill Biden called them CelticCapri Corp. and Giacoppa Corp., respectively, and, according to the Wall Street Journal, have reported more than $13 million in profits the previous two years that weren’t subject to specific disclosure or self-employment taxes. As CNBC has described, money Biden made from book deals and speeches flowed into the S corporations and was then remitted to Biden and his wife as “distributions” rather than salary. When money is funneled through an S corporation, the recipient doesn’t owe Social Security or Medicare taxes on it, nor can the source of revenue be traced. (In addition to the distributions, the Bidens drew relatively small salaries from the S Corporations: under half a million dollars, for which they owed self-employment taxes.)

Is there anything wrong with any of this? No. It’s all perfectly legal.

What is also true, though, is that the Bidens probably would have owed a lot more in taxes if they’d been earning this money as full-time employees of their company or of someone else.

Now I’ll say the same thing about Biden that I said about Trump: The less rich people pay in taxes, the better, because the private sector always allocates capital more efficiently than politicians. The problem is that Trump knows that, and his policies reflect that he understands it. Biden, on the other hand, rages about how horrible it is that Trump didn’t pay more in taxes (even though it’s a total lie that he only paid $750 a year), when in fact Biden deploys similar strategies to minimize his tax liability.

There’s an overused word that starts with an H, and I won’t be using that word here. What I will tell you is that Joe Biden never means a word he says about anything. What you’ll hear today is that Joe Biden is some sort of patriot for paying all these taxes. He’s not. He avoids paying any more than he absolutely has to, just like Trump does.

Then Biden turns around and pretends to be outraged by the very same thing he does.