Dems Rebuke Trump's Ultra-Rich Treasury Chief Over $910,000 in Unpaid Medicare Taxes

A group of Senate Democrats on Wednesday pushed US Treasury Secretary Scott Bessent to pay back the nearly $1 million in Medicare payroll taxes that he reportedly owes from his years as a hedge fund manager.

In a letter to Bessent, the senators pointed to a recent court ruling clarifying the scope of a self-employment tax loophole that is widely exploited by hedge fund managers and private equity executives. During his confirmation hearing last year, Bessent cited the then-pending litigation to justify his decision not to pay $910,000 in payroll taxes he potentially owes the Internal Revenue Service, and pledged to set up a "reserve fund to address any contingency related to this issue."

"We write to ask whether you will uphold your commitment to pay the Medicare tax you avoided during your time as a hedge fund manager in light of last week’s Second Circuit opinion about the scope of the limited partner exception," the Senate Democrats wrote in their letter. "Your avoidance and delay tactics have already cost the Medicare trust fund hundreds of thousands of dollars. Now that the appellate court has spoken, will you use your reserve fund to pay the avoided tax?"

Bessent, who has an estimated net worth of around $500 million, currently oversees the IRS as head of the Treasury Department, and he previously served as the tax agency's acting commissioner.

Sen. Ron Wyden (D-Ore.), the ranking member of the Senate Finance Committee and one of the letter's signatories, said in a statement on Wednesday that Bessent "is the highest ranking tax official in America and he is failing to lead by example by exploiting tax loopholes to avoid payroll taxes that every working American pays out of each paycheck."

"In Trump’s America, you have to pay your fair share of taxes, but the ultra-rich like Scott Bessent get to pay what they want, when they want," said Wyden. "Many Americans are financially struggling in Trump’s economy. Until he pays what he owes, Secretary Bessent is placing himself above the law."

The New York Times reported last year that "like many firms on Wall Street, Mr. Bessent’s hedge fund, Key Square Capital Management, was set up as a limited partnership."

"Through that structure, Mr. Bessent avoided paying roughly $910,000 in Medicare taxes on money he made running his hedge fund in 2021, 2022, and 2023," the Times reported, citing a memo prepared by Democratic Senate staffers ahead of Bessent's confirmation hearing. "Mr. Bessent’s decision to not pay the additional tax has now put him in the unusual spot of personally opposing—and having a personal stake in—how the IRS interprets tax law. And since he took office, the Treasury and IRS have backed away from developing regulations to address it."

Under Bessent's leadership, the Treasury Department has worked to deliver fresh tax breaks to large corporations, championed President Donald Trump's deficit-exploding tax cuts for the wealthy, overseen the gutting of IRS staff, and refused to close loopholes leveraged by the richest people in the US—including one that benefits private jet owners.