So Gingrich put out his 2010 tax return and the inspection reveals something interesting:
Republican presidential candidate Newt Gingrich avoided paying about $69,000 in payroll taxes in 2010 by using a tax strategy that characterized money he collected from one of his companies as profits rather than salary, a tax expert said in an email sent to MarketWatch and other news organizations.
Gingrich paid himself a salary of about $420,000 but also collected $2.4 million in profits from his S-corp, said Robert McKenzie, a partner in the Chicago-based law firm Arnstein & Lehr, after he reviewed Gingrich’s 2010 tax return. That means Gingrich avoided Medicare taxes of 2.9% on that $2.4 million, saving about $69,000 in taxes for 2010. A spokesman for Newt Gingrich has not yet replied to a request for comment..
And guess who did the same:
It’s been called the “John Edwards loophole” in the past, because the former presidential contender used the same strategy to pay himself from his law practice. The tax strategy is not uncommon: In a 2009 report, the Government Accountability Office said that S-corps. underreported about $23.6 billion in shareholder compensation in 2003 and 2004, which could “result in billions in annual employment-tax underpayments.”
But in the end, it's likely Rmoney will still be able to say to Gingrich, "My tax loophole is bigger than yours."