Newt Gingrich, tax cheat. Of course. (Jeff Haynes/Reuters)
Turns out that Mitt Romney isn't the only Republican presidential candidate to
exploit tax loopholes and pay far less than a wealthy patriot should. Seems that Newt Gingrich is
a bit of a tax dodger, too.
Newt Gingrich avoided tens of thousands of dollars in Medicare payroll taxes in 2010 by using a technique the Internal Revenue Service has consistently and successfully attacked. Republican Presidential candidate Gingrich and his wife, Callista, treated only $444,327 of what they got from Gingrich Holdings. Inc. and Gingrich Productions as compensation to them, while reporting a whopping $2.4 million of their earnings from these corporations as profits or dividends. Medicare taxes are levied at a rate of 2.9% on an unlimited amount of compensation and self-employment income (say, from a consulting contract, speeches or a book) but not on profits from a business.
“It appears that he is not paying his fair share of Medicare tax,’’ Robert E. McKenzie, a partner in the Chicago law firm of Arnstein & Lehr LLPconcluded, in an email to Forbes, after reviewing Gingrich’s 2010 tax return. McKenzie, a past chairman of the Employment Tax Committee of the American Bar Association Tax Section and a member of the IRS’ Advisory Council, added: “There are a multitude of cases where the IRS has successfully challenged the improper tax strategy of this candidate and his accountants. Service businesses are only allowed to distribute a fair return on investment from an S corp. as profits exempt from Medicare taxes. The remainder of profits must be paid as salary subject to a 2.9% Medicare tax levy.”
Of course he cheated on his taxes. We're talking about a Republican here, never mind one as sleazy as Gingrich. They're not going to pay more than what they absolutely have to, all the while proclaiming their great love of country.
But it kind of puts the lie to Gingrich's claim that he has "always publicly favored a stronger Medicare program." Or maybe not. He "publicly" favors a strong Medicare program, but privately has chosen to cheat it.
(Via Think Progress)