The Bidens saved hundreds of thousands of dollars in taxes using a loophole that the White House now says needs closing

Biden’s Plan to Avert Medicare Funding Crisis Includes Tax Hikes on High Earners by Andrew Restuccia, Richard Rubin and Stephanie Armour of The WSJ. Excerpt:

"Under current law for Medicare taxes, which come on top of regular income taxes, most employers and workers each pay a 1.45% payroll tax for a total of 2.9%. Self-employed people pay both sides of the tax. 

Top earners—individuals making more than $200,000 and married couples making over $250,000—pay an additional 0.9% on money above those thresholds for a total of 3.8%. In addition, a parallel 3.8% tax applies to net investment income for that same top group. 

That doesn’t, however, create a uniform 3.8% tax on income. Active business income—like the profits of a closely held manufacturer—isn’t subject to the payroll tax or to the investment-income tax. 

Some professional-service business owners have structured their finances to classify their income as profits that don’t face a 3.8% tax instead of self-employment income or wages. A White House document calls out that maneuver as a loophole that needs closing.

The president and first lady Jill Biden used that technique, likely saving hundreds of thousands of dollars in taxes on the income they earned from speeches and books after his term as vice president ended, according to tax returns they released publicly."