Abdul El-Sayed, Michigan's Democratic Senate nominee, has built his campaign around making the wealthy "pay their fair share" in taxes, but his own financial filings suggest he may be using a well-known compensation structure that accountants say reduces the payroll taxes he owes.
El-Sayed paid himself a $64,000 salary through his consulting firm, AME Higher LLC, while taking an additional $103,000 as a "member draw," the Washington Free Beacon reported. Three accountants told the outlet that the split between salary and draw is consistent with an S-corporation tax election, a structure that shields the draw portion from Social Security and Medicare payroll taxes. The salary portion gets taxed at the standard 15.3 percent self-employment rate. The draw does not.
That matters because El-Sayed's campaign website declares that "the ultrawealthy should no longer be able to hide behind loopholes that leave them paying lower tax rates than the rest of us." He has pledged to close the Social Security payroll tax cap and says he wants to "build a tax system that's fair for working people and makes billionaires pay their fair share."
His own financial disclosure, covering all of 2025 and the first seven months of 2026, tells a different story. El-Sayed's total reported income for 2025 was $686,069, enough to place him in the top 1 percent of Michigan earners, where the threshold sits at $611,500. He owns three rental properties, including one in Bangalore, India, and one in Dubai. He reported $262,299 in capital gains. And the partial tax return his campaign released on July 15 omitted the Schedule 1 and Schedule E forms that would show S-corporation income.
Robert Willens, a tax and accounting adviser to Wall Street hedge funds, reviewed El-Sayed's disclosure and held nothing back.
Willens told the Free Beacon:
"The split between the compensation and the distribution may have been done with an eye towards tax havens."
A second accountant, who spoke anonymously out of fear of reprisal, agreed. He said the structure only makes sense if El-Sayed elected to have his LLC taxed as an S-corporation, a box you check on an IRS form.
"So if it's an LLC, and he checked the box that says you're going to operate as an S-corp, that's probably the only thing that would make sense."
A third accountant explained that the owner of an LLC taxed as an S-corporation can pay himself a W-2 salary, while the owner of a more traditionally taxed LLC generally cannot. El-Sayed's disclosure lists a $64,000 salary from his consulting firm, a figure that looks like the "reasonable salary" the IRS requires S-corporation owners to set, subject to payroll taxes, before they take remaining profits as distributions that dodge those same taxes.
If El-Sayed had paid himself the full $167,000, the combined salary and draw, as ordinary compensation, the entire amount would have faced the 15.3 percent payroll tax rate: 12.4 percent for Social Security and 2.9 percent for Medicare. By splitting it, the $103,000 draw may have avoided those taxes entirely.
El-Sayed's campaign did not respond to the Free Beacon's request for comment.
The structure is not new. It carries a bipartisan pedigree, and a bipartisan stench.
In 2004, the New York Times reported that John Edwards, then the Democratic vice presidential nominee, had created an S-corporation to lower taxes on his trial-lawyer income. Edwards was simultaneously attacking President Bush for favoring the wealthy and blaming tax shelters for undermining Medicare. His campaign spokesman offered a defense that could have been written by a tax attorney: Edwards "believes that no individual should pay more than they owe in taxes."
Newt Gingrich drew similar fire during his 2012 presidential run. His tax returns showed $444,327 in salary and $2.4 million in profit payments from two firms, a ratio that leaned far more heavily on the lightly taxed distribution side. By 2014, CNBC had given the arrangement a name: the "Gingrich-Edwards tax loophole."
Barack Obama tried to close it in his 2015 budget. He failed. Willens called the strategy "still a very viable strategy."
Joe Biden used a version of the same approach after leaving the vice presidency, routing book and speech income through S-corporations and substantially lowering his tax bill, as the Wall Street Journal reported. Biden used a corporation rather than an LLC, but the tax logic was the same: pay yourself a modest salary, take the rest as distributions, and let the payroll tax savings add up.
El-Sayed's apparent use of the structure is awkward not just because of his own rhetoric, but because members of his own party have been trying to shut it down.
Sen. Sheldon Whitehouse of Rhode Island proposed the Medicare and Social Security Fair Share Act in 2023 and reintroduced it in 2025. In March 2026 testimony before the Senate Budget Committee, Whitehouse was blunt:
"Right now, wealthy owners of pass-through businesses like hedge funds and private equity firms can avoid paying Medicare taxes entirely. My bill would close that loophole."
Whitehouse's bill targets pass-through business income for earners above $400,000 annually. El-Sayed's 2025 income of $686,069 clears that threshold by a wide margin. Sen. Ron Wyden of Oregon proposed a separate 2025 bill targeting "pass-through entities" that "avoid paying their fair share of taxes." Neither Whitehouse's office nor El-Sayed's campaign responded to the Free Beacon's requests for comment.
El-Sayed's campaign website says he supports "taxing capital gains over $1 million at the same rate as ordinary income and closing the stepped-up basis loophole." He says he will "fight to close the Social Security payroll tax cap." But his own partial tax return does not reflect capital gains over $1 million, and the loophole his fellow Democrats want to close appears to be the one his LLC may be using.
The tax arrangement is one layer of a broader pattern. El-Sayed has positioned himself as a champion of working people while living comfortably in the economic tier he attacks. At an August 2025 campaign event, he said: "For people who have accumulated so much wealth that your money makes money, at some point, we're like, well we can't possibly tax them." His 2025 capital gains of $262,299 suggest his own money is making money.
He owns two rental properties abroad, in Bangalore and Dubai, despite criticizing "greedy landlords" on the campaign trail. His combined rental property holdings are worth $750,000. His 2025 income nearly tripled the $237,000 in gross income he disclosed during his unsuccessful 2018 gubernatorial run.
His wife, psychiatrist Sarah Jukaku, runs a private practice that does not accept Medicare, the very program El-Sayed says he wants to expand through Medicare for All.
El-Sayed won the Michigan Democratic Senate primary on August 5, 2026, defeating establishment-backed Congresswoman Haley Stevens. National Review noted the victory as a milestone for the Democratic Socialists of America's influence within the party. His platform includes Medicare for All, Supreme Court packing, abolishing the filibuster and the Electoral College, and eliminating ICE.
On NBC's Meet the Press, El-Sayed acknowledged that his Medicare for All plan would likely increase taxes on middle-class Americans, a concession that sits uneasily beside his campaign messaging about putting more money in voters' pockets. The program is estimated to cost between $2.5 trillion and $3.5 trillion annually in increased federal spending.
He faces Republican Mike Rogers in November. Pre-primary polling showed Rogers leading El-Sayed by 10 points in a general election matchup, while Stevens led Rogers by one point. An Emerson College survey found a stark age divide in the primary: voters under 50 broke for El-Sayed by 42 percentage points, while voters over 60 favored Stevens by 14.
California Governor Gavin Newsom has traveled to Michigan to campaign for El-Sayed, calling the Senate race critical. Newsom dismissed Republican efforts to paint El-Sayed as an extremist, while acknowledging the race "will be a very tough race in November."
El-Sayed released just two pages of his 2025 federal tax return. Those pages list $130,749 in W-2 wages, a figure that does not precisely match the $146,749 in salary income reported on his financial disclosure. The discrepancy is unexplained. More importantly, the release omitted Schedule 1 and Schedule E, the forms that would show whether AME Higher LLC elected S-corporation status and how the $103,000 member draw was taxed.
Without those schedules, the public cannot confirm or rule out the S-corporation arrangement. But the accountants who reviewed the available filings said the compensation structure speaks for itself. The second accountant told the Free Beacon that if El-Sayed's company was not taxed as an S-corporation, he "wouldn't take the income out" the way he reported it on the disclosure.
El-Sayed has refused to release his full tax returns.
Voters can judge a candidate's policies on their merits. But when a man runs for the Senate promising to close the loopholes the wealthy use to dodge taxes, and his own financial filings look like a textbook example of one of those loopholes, the gap between the sermon and the practice is the story.
