A Romney Tax Return Placeholder Post

Right now, I have 200+ pages of Mitt Romney’s 2010 tax return clogging up my work printer. He’s a Mormon, it’s a tax issue, I’m a tax guy, so there will clearly be a blog post in the near future. Unfortunately, I also have a job and a family and obligations (and did I mention it’s 200+ pages?), so that post may or may not happen in the next couple days.

I’ve glanced through really quickly and, even though it’s fascinating, there doesn’t seem to be anything terribly surprising (his effective rate’s a little lower than I expected, but not much). Still, if there’s anything you’re curious about regarding his tax returns, please feel free to leave questions in the comments; I’ll try to answer them in my next post.

As you leave comments, though, remember our comments policy. Specifically, don’t insult each other, don’t call Romney’s (or anybody else’s) personal righteousness into question, and, in general, play nice. And enjoy the look into a world of personal finance most of us rarely see.

19 comments for “A Romney Tax Return Placeholder Post

  1. Sam-

    Maybe you can clear up a question for me or any other LDS person interested in Mitt Romney’s tithing paid. (As of now, I haven’t read the return, only reports about the return.) According to an ABC News report (http://news.yahoo.com/mitt-romney-reveals-tax-records-paid-3m-taxes-221209778–abc-news.html) Romney reported $21.7 million in income for 2010. The same source reports him as donating $1.5 million to the Church. If the 1.5 million is tithing paid (not counting other donations such as fast offering), this figures is well below the threshold of 10% of income. It actually comes out to about 6%. Am i missing something here?

  2. bnice:
    That article says that Mitt gave $4.1 million to the Church over two years, while his income for one of those years was $21.7 million. It will probably work out to 10% in the end, particularly since Mitt apparently does not have to worry about the gross/net tithing debate like the rest of us wage-earners do. But blj’s question still stands.

  3. blj, I don’t have any inside information, of course, but I have a guess that I’ll include in the full post. Thanks for the question. (Also, the 2010 return is long enough that I’m not going to bother looking at the tentative 2011 return, especially since he won’t have a lot of significant information for it until probably sometime after April.)

  4. How does this mesh with the transfers he and his wife made to their foundation, which makes donations to the Church, BYU, and other 501(c)(3) entities, and which were already reported on some time ago?

  5. Raymond Takashi Swenson makes a good point…It is possible that he pays some tithes and offerings through his foundation, which would not show up on his return as donations to the church.

    And it’s also possible that he has pre-paid in earlier years, in effect paying an average 10% (or higher) rate over time but not necessarily in a given year.

    Another problem is that the definition of “taxable” income from his return may be different that his true “economic” income in some sense, and he may (quite justifiably) be paying on some other basis than what is listed as his taxable income on his return.

    I think it will be very difficult for us to second-guess whether we think Romney is a full ten-percent tithe payer according to the definitions of “increase” or “income.” In the end it is between him and the Lord. In any case it is clear that he has already donated more to the church than most of us will make in our lifetimes.

  6. I’m sure Mitt pays 10 percent, but I would be interested in what kind of a federal tax write off (subsidy ?)he receives for his tithing contribution. I assume the reason he contributes stock is to get a higher tax write off. I would be interested in knowing what his actual tithing contribution is after the federal subsidy is subtracted.

  7. Roger: Mitt gets nothing for tithing; he hax maxed his charitable contribution deduction by making the other charitable donations even before he gets to tithing deductions.

  8. Actually, Blake, he was able to fully take his charitable deductions (or at least the ones he lists on his tax return—if he made charitable contributions that he didn’t claim, I don’t know anything about those). Section 170(b)(1) permits individuals to deduct charitable contributions in an amount up to 50% of their adjusted gross income, with certain adjustments.

  9. We typically pay about quarterly. I know in my case, we’ve paid our last tithing check in December and it didn’t get cashed until the beginning of the next year (which affected our taxes in one year, and made it look like we made a lot more than we did on our tithing statement the following year).

    I know in my own case, from random bonuses, unexpected side jobs, etc. that come up during the course of the year, we’re always having to go back and make sure we remember everything.

    In Romney’s case I imagine simply calculating his tithing would be much more difficult. Whatever the case, the church isn’t as interested in maximizing the dollars and cents we pay in, but in helping us to realize the blessings of consecrating ourselves to God.

  10. Sam:

    It looks like about $13 million over the last 2 years was carried interest.

    From a policy perspective how does Romney defend carried interest as deserving an investment income rate without beclowning himself? With investment income you can defend the lower rate by arguing taxes were already paid on it when the money was originally earned or we want to incentivize investment, but neither of those arguments work for carried interest.

    I just think Romney is going to have to pick his battles and this is one he’ll decide to concede.

  11. Donors do not really “get” anything from the government in exchange for charitable contributions. What really goes on is something like this:

    John pays $100 to his church. Government rebates $15 to that back to John. Church keeps all $100.

    What has really happened?

    John is out of pocket $85, government is out $15, and church receives $100. In other words, John hasn’t really made a $100 contribution at all, he has made an $85 contribution, and the government matches that with an additional $15.

    The subsidy goes entirely to the charity of John’s choice, not to John at all. That is why 501(c)(3)s are so desperately opposed to reforms that eliminate the charitable contribution deduction. It means they would lose a substantial subsidy from the government.

    Among active tithe payers it probably wouldn’t make too big of a difference, because it would simply mean that the real tithing rate had gone up from 8.5% (or whatever) to 10%, and in principle the church would receive the same amount of tithing as before, just from entirely from actual tithe payers instead of a mixture of tithe payers and tax payers.

    But for other contributions the real effect would be to make contributions more expensive to contributors, meaning (all else equal) lower total contributions. The governmental subsidy is real, and its removal would have a substantial effect on donations received. 5% decline, 10% decline due to loss of subsidy, it is hard to say.

    Probably much less of a decline for the LDS Church than many others, for the reasons mentioned, but no doubt substantially more than a rounding error.

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