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Biden released additional years’ worth of tax returns this week, revealing that he and his wife funneled profits from their books and speeches through S corporations, as first noted by The Wall Street Journal. The controversial tax savings strategy – which Obama had tried to close – saved the couple as much as $500,000.
The loophole is known as the Gingrich-Edwards loophole, and Obama had called for its end as part of one of his budgets. It essentially allows self-employed people to set up an S corporation in order to avoid payroll taxes – including Social Security and Medicare taxes.
It is legal, and allows people to treat income as company profits instead of a salary. According to research conducted in 2009, closing the loophole would raise $11.2 billion in revenue over the course of the decade.
The Treasury Department estimated that loopholes allowing people to evade Medicare and Social Security taxes have cost about $25 billion each year, as reported by The New York Times.
Former presidential candidates Newt Gingrich and John Edwards drew scrutiny for using the loophole, hence its name.
A spokesperson for Biden’s campaign did not immediately return FOX Business’ request for comment.
Biden released his most recent tax returns on Tuesday, which showed that he and his wife earned about $15 million in the two years since leaving the White House. The Bidens’ total income was $11 million in 2017 and about $4.6 million in 2018.
The role of money in politics has come under increased scrutiny – particularly after left-leaning billionaire Tom Steyer entered the race on Tuesday. Independent Vermont Sen. Bernie Sanders and Massachusetts Democrat Sen. Elizabeth Warren both spoke out against inviting more billionaires into the political process.