Mitt Romney gives lots of money to his church! Sorta. It turns out he’s also a very clever man, with a deep knowledge of the tax code, who has cunningly used loopholes to generate the appearance of giving money to the church while keeping most of it for himself.
Romney reportedly took advantage of a loophole, called a charitable remainder unitrust or CRUT, which allows someone to park money or securities in a tax-deferred trust marked for their favorite charity, but which often doesn’t pay out much to the non-profit. The donor pays taxes on the fixed yearly income they get from the trust, but the principle remains untaxed . Congress outlawed the practice in 1997, but Romney slid in under the wire when his trust, created in June 1996, was grandfathered in.
The trust essentially lets someone “rent” the charity’s tax-exemption while not actually giving the charity much money. If done for this purpose, the trust pays out more every year to the donor than it makes in returns on its holdings, depleting the principal over time, so that when the donor dies and the trust is transferred to the charity, there’s often little left. The actual contribution “is just a throwaway,” Jonathan Blattmachr, a lawyer who set up hundreds of CRUTS in the 1990s, told Bloomberg. “I used to structure them so the value dedicated to charity was as close to zero as possible without being zero.”
Indeed, this appears to the case for Romney’s trust as well. Bloomberg obtained the trust’s tax returns through a Freedom of Information Request and found that Romney’s CRUT started at $750,000 in 2001 but ended 2011 with only $421,203 — over a period when the stock market grew. Romney’s trust was projected to leave less than 8 percent of the original contribution to the church (or another charity that he can designate). This, along with the trust’s poor returns — it made just $48 in 2011 — suggest the trust is not designed to grow for the LDS church but just serve as a tax-free holding pool from which annual payments can be disbursed to the Romneys.
If he’s so willing to screw over the god he worships, one has to wonder what he’s planning to do to the country.
Mitt Romney: The appearance of charity, without the actual charity. Truly he is a candidate for our times.
The actual contribution “is just a throwaway,” Jonathan Blattmachr, a lawyer who set up hundreds of CRUTS in the 1990s, told Bloomberg. “I used to structure them so the value dedicated to charity was as close to zero as possible without being zero.”
I love it how such people, seemingly without remorse, tell stories about how they cheated the law and their conscience.
This doesn’t sound like a scheme to get out of paying tithing. Having been a Mormon until my mid-20s, I didn’t know many members who left anything to the church. The yearly 10% plus donations to the welfare and mission funds are plenty. The real question is whether Mitt pays his tithing based on his gross or net income. My dad really believed in tithing and always based his 10% on his gross income.
Further evidence that by placing himself among the 47% who pay the lowest taxes, Romney clearly intends to vote for Obama.
Anyone who is willing to screw over the god he worships can’t be all bad.
That’s an …odd construction.
I’m not a tax lawyer but it sounds like it probably came from a perversion of the rules governing normal charitable trusts.
A normal charitable trust works a bit like this.
Suppose I win $100 million in the lottery. I want to give 10% of it to charity. I could go to 10 of my favorite charities and give them a million dollar check. I’d get my name in the paper and go to a lot of functions. Or I could give one charity a $10 million dollar check and get a building named after me.
What a lot of financial advisers would say is that “hey, take that $10 million put it in a charitable trust. You can still claim all the tax benefits of donation and with proper investment it will generate somewhere between $350,000 and $1,000,000 you can donate every year. You will donate more money over 15-20 years and you can costs of work related to the trust as donations in kind.
CRUTs were established to be just like they were: that’s the “remainder” in their name.
They were designed to allow a wealthy, elderly person to put most of their estate into an irrevocable trust and live off the proceeds. This has a lot of advantages: the person gets a very large tax write-off when the trust is created, the money can grow tax-free, and the only income is the income drawn from the trust, which is (in theory) set low enough so as not to interfere with pension payments such as Social Security. The catch was that there also had to be a stream going in to the trust in order to keep it active. All in all, they were a very good idea for the right sort of people.
The problem is that they got abused very heavily, just as the Romneys have done. Make a huge “donation”, get the fat tax write-off, make a token contribution and draw down the capital until there is effectively no remainder. Instead of paying taxes on the $750,000 every year, they got to deduct their “charitable giving” and then pay taxes only on what they were taking back out. This kind of abuse is exactly why Congress got rid of them.
Maybe Mormon Mittens is a secret athiest too?
After all, if you know there’s really no god to fear – or worship why would you bother except to scam and for appearances?
Of course, even if (like I suspect Obama) Mitt the Shit is a secret atheist that doesn’t mean I think folks should vote for him given his gross hypocrisy and sociopatheic self-centredness.
Still for once Mitten is actually being consistent & ican’t imagine his “Money for me not thee Moron Church” policy will change tomorrow. (Thinks on that and starts hyperventilating with shock.)
Romney a closet atheist? Not a snowball’s chance in a fictional place. Come to think of it, that could be one subject of a James Thurber pastiche – “The Secret Life of Mitty Romney”.
If (the Wizard of Oz forfend) Romney is elected, I’m sure he’ll grant an audience to that great cult leader, Mr. Ratzinger, and the two of them can exchange notes on interesting money practices.
Bullshit. And possibly mormonish bullshit. We’re not talking about tithing. We’re talking about yet another of Romney’s tax dodges, and this one just happens to involve using the LDS Church’s non-profit status as a front for dodging taxes.
Yes, tithing is a scam too, but this is not related to tithing. For the record, Romney had to purposely fail to claim about half of the tithe he paid in 2011 in order to force his tax rate above 13% (to match his previous claims). For the record, he paid more tithing in 2011 than he did in 2010 to make up for the less than 10% he paid in 2010. People noticed, you see, that he had paid less than 10% in 2010, and that didn’t match either his previous claims nor his Church’s blackmail-like rules for temple worthiness.
Unless Mitt releases his taxes for the last six years at least, as opposed to the two years he has released, you will never know how much tithing he really pays.
Whatever tithing he does pay is going to a LD$ Corporation, which does very little good when compared to the massive harm it causes. Link to mall-building efforts article. Link to “Mormon Tithing is Not Charity thread.
It figures that some of Romney’s methods of charitable giving would amount to a lie. Lying is what he does.
When both Chrysler and GM have to weigh in on Romney’s lies, you know the campaign has gone too far.
Romney went too far with his tax dodges. Put the two together, the lies and the iffy tax dodges, and you have a man with no integrity.
As yet another piece of evidence that Romney has no integrity, look at the attack ad Romney is now running:
Ad video and commentary are available at this link.
Romney truly is devout.
He is a devout member of The Church of Money.
Money is his God.
OMFG. We’ve talked about Romney’s fake “Storm Relief” event that was really a campaign rally. That’s the event at which Romney arranged for the appearance of charitable giving as opposed to real charitable giving.
As details emerge, that event was even worse than we thought. That is, just like Romney’s charitable trust, it was more fake than we thought.
I was once a very devout Mormon and I can attest that the 10% tithing paid by members is encouraged to be paid on one’s gross income (as opposed to net) although not all members follow that suggestion. This money goes to the construction of new buildings, temples, land purchases, and other similar projects.
While the church does have a robust and very helpful welfare program the money that supports that is all gained from what is called “fast offerings”. Members are encouraged to fast on the first Sunday of each month and then give the money they would have spent on the meal to the church. Or at least that was the original idea, in the modern world members just usually give a fixed amount they are comfortable with and this is the money that is used for the welfare program and for actual charity work. Members claim both tithing and fast offerings, as well as donations to the church’s missionary and education funds on their taxes.
Why do I say all this, well just to point out that many of the previous posters are fairly correct. I have never understood why members can count tithing as a “charitable” donation when that money is never used for any real charity. Likewise the missionary donations which only go to help pay for all those thousands of young men and women “spreading the gospel” all over the world (although it should be noted that most of that expense is paid by the families of the missionaries themselves who are required to pay $400 dollars a month while their child serves).
Now the fast offering money and money that goes to support the education of members in poorer countries is what I would call charity but that is really a pittance compared to the tithing the church takes in, not one dime of which goes to any real charity. I admire the churches welfare program but am greatly saddened by the fact that most members, while they will praise the church welfare, abhor any government welfare of any kind.
Thankfully, at least in my mind, I have left Mormonism and religion behind. I get 10% more each check, Sunday’s off (no more 3 hours of church), and a much more rational outlook on life.
Its really unfortunate, given the resent BS from these people, that we would be slandering ourselves if we did it, but my first thought on the prior comment about the Church of Satan using Ayn Rand like ideas was, “Man, that would make a damn good National Enquirer article.” lol But, then, given the stupid “Obama” movie they put it, a little quid pro quo seemed in order.. Like, a movie tracing aristocratic elitism, a la Paul Ryan, Church of Satan, Ayn Rand, Nietzsche, etc. traced as far back, fictionally or otherwise, to the old money lenders, or something would be just about right. I can just see the scene in Rome, two guys discussing the new rising religion, and how to maybe profit from it, if it goes anywhere, while describing how one of them just “helped” someone out of financial straights, by buying them out, then turning around the next day and selling off all the land and assets to other people.
Needless to say, this, “Rob the church, while pretending to help it.”, thing is just more inspiration. Bet, damn do these people deserve to have someone suggest that they are not really “Christian”, but some sort of freaks, who just play at it, while actually… well, its not like the movie would actually say they where Satanists. Its purely coincidence that the founder of that idiocy used the same playbook, really… lol
To some extent, ye shall know them by their surrogates. Donald Trump is a top surrogate for Mitt Romney. He campaigns for him. He fundraises for him, etc.
Since Hurricane Sandy hit the East Coast, Trump has demonstrated that he approaches charitable giving in sneaky, fake-charitable ways. Hmmm. Similar to Romney style.
That’s a reference to Trump’s Doctor Evil offer of five millllliooooon dollars if the president released his passport and college transcript by 5 p.m. on Oct. 31.
More from Trump:
This is what I said – it wasn’t because he was afraid of the IRS or the voter backlash that he didn’t want to release his returns – it was because he knew the Mormon Church would find out how much he’d been screwing them. That and I find the two year limit interesting because it’s the 2009 returns that would show if he was one of the individuals caught in hiding money in Swiss bank accounts.
Romney is charitable toward business cronies. He gives them tax breaks and he removes the terrible burden of regulations that are meant to keep the little people safe. At least that’s how he operated as Governor of Massachusetts. Now it turns out that Romney Style may have caused the deaths of 25 people. So far.
http://www.salon.com/2012/10/30/romneys_lax_regulation_fueled_meningitis_outbreak/
This is true.
I never thought I’d have anything good to say about the Morgbot 3000. But he and his lawyers are wizards at financial and tax avoidance engineering.
Romney has a $100 million IRA in Bermuda.
I want one of those. Do you have any idea how many cats that would feed? There are contribution limits on IRA’s, used to be 2,000 now 5,000-6,000.
I’ve yet to see an explanation of how he did it. Even professional tax lawyers seem mystified.
It seems to involve a lot of self dealing and vastly undervalueing assets contributed to the IRA. For example, contribute property valued at $1,000 to the IRA in Bermuda. A few years later, sell it for $1 million. Or something.
This should be bigger news. It really makes them both look like assholes, especially ann romney’s defense of their finances by saying they give 10% to their church.
I am pretty sure he can just pay someone else to figure it out for him, and then if any of it ends up being illegal he can claim he had nothing to do with it. Why someone would dirty their hands and waste their time by getting directly involved is beyond me, it sure as fuck wouldn’t make them “clever”.
I hear physical security on offshore funds is pretty light…
…Can you imagine what would happen if someone pulled an “Ocean’s 11” on Mitt and took all his money away?
would the man simply deflate like an old balloon?
Romney’s pathology is not atypical, unfortunately.
Mitt envies and fears his father, even today when the man’s dead.
He has an overwhelming need to outdo the old man, at whatever cost. His father ran for VP, so Mitt needs to be President. It is not enough to be a candidate or also-ran.
I am a tax and estate planning lawyer; I have designed and drafted (and I am still using) CRUTs and their close cousins, CRATs, and I have dealt with CRUTs that posed technical problems when the people who created them did not take out the required distributions, or when the investments in the CRUTs underperformed, etc. There are several varieties of CRUTs designed to receive and hold assets that may not generate much income in the early years.
This news about Romney and his “charitable giving” doesn’t surprise me at all, but both the Salon article and the Jesse Drucker article at Bloomberg contain some over-simplifications. It’s not the case that every wealthy person who gives money or other assets to a CRUT is a creep with faux charitable pretensions.
If you are really curious and don’t mind being bored, read on.
I’m still using CRUTs and CRATs, and many of my colleagues are as well. They are useful for clients who genuinely want to leave valuable assets to charity in the long term (in 10 years, in 20 years, or after the death of some person), but who want a stream of payments to go to themselves or to some other individual (such as a child) for a period of time in the nearer term.
I have found that very few clients have any interest in creating and funding these trusts unless they really want charities to benefit, and to benefit significantly, when the trusts end. I assure you that when CRATs and CRUTs are properly designed to comply with the tax rules, the charitable organizations are genuinely happy to be named as the remainder beneficiaries (not as happy as if they received up-front, unrestricted gifts, but pretty darned happy).
The main difference between CRUTs and CRATs is that with CRUTs, the market value of the assets still inside the CRUT is redetermined annually, in order to determine the dollar amount of the distributions to be made to the non-charitable beneficiary each year. With a CRAT,the assets are valued once, when the trust is first funded. Additional gifts can be made to a CRUT but not to a CRAT.
When a person creates and funds a CRAT or CRUT, he or she receives an income tax charitable deduction and a gift tax charitable deduction only for the actuarial value (discounted present value) of the remainder interest going to the charitable beneficiary when the trust terminates, based on the number of years in the term (or the life expectancy of the non-charitable beneficiary, if the CRAT or CRUT is set up for lifetime), and using an IRS-published discount rate.
Since 1969, there have been strict ordering rules for how the distributions coming out of a CRUT or CRAT are treated, for income-tax purposes, by the individual (non-charitable beneficiary) receiving them; if the CRUT or CRAT is generating ordinary income, capital gains, and tax-exempt bond interest, these rules will require the distributions to be treated first as consisting of ordinary income (higher tax rate), then capital gains, then tax-exempt income, and finally tax-free return of principal. If I give some highly-appreciated farm land to a CRUT instead of selling it at a huge capital gain, and if the CRUT’s trustee sells the land a little later, the CRUT itself does not pay any capital gains tax, but the taxable gain will get dribbled out over time to the non-charitable beneficiary (me) inside the distributions. The income taxes on such gains and income can be stretched over time and deferred to some extent, but not avoided altogether so long as the non-charitable beneficiary is living.
The notion that a CRUT or CRAT allows an individual to “rent” the tax-exempt status of a nonprofit charity is a flashy journalistic distortion.
CRUTs are not purely a “tax dodge,” although pre-June & July 1997, when rules were tightened by the Congress and the Treasury, it was possible to set up a perfectly legal CRUT that would pay out nothing or almost nothing to the charitable remainder beneficiary(ies) at the end of the term. Nowadays, a CRUT or CRAT will not qualify under the current (post-1997) rules, and the donor will not get any income tax or gift tax charitable deduction, unless the discounted present value of the charity’s remainder interest (what the charity gets when the CRUT terminates) is at least 10 percent of the total fair market value of the assets given to the CRUT. You can look it up: 26 U.S.C. 664(d)(1)(D) and 664(d)(2)(D). Another of the 1997 reforms is that the annual payout percentage (to the non-charitable “lead” beneficiary) from a CRAT or CRUT cannot exceed 50 percent of the initial asset value (for a CRAT) or 50 percent of the asset value at the beginning of any given year (for a CRUT). Since 1997, I don’t know anyone who has set a percentage even close to 50 percent, because the CRAT or CRUT still needs to satisfy the “10-percent minimum” requirement.
Finally, a CRAT (which does not re-determine the value of the assets in the trust each year) must also satisfy an “exhaustion test” that the IRS published in 1977: The likelihood that the CRAT will exhaust its assets before the end of the term (leaving nothing for the charity) cannot be more than 5 percent.
@10.toro
Really? Hmm..Okay.
Let’s say you truly believe in a supposedly all-seeing and all-powerful god who also happens to have an awful temper. Silly premise I know but run with it a minute. Just say you did. Would you then try to cheat this divinity by pretending to give to him whilst really keeping your money to yourself.
Remember, all seeing, all-knowing, real, real bad tempered god.
I rest my case.
PS. Oh & have folks seen this :
http://www.youtube.com/watch?feature=endscreen&NR=1&v=kWdVminV7uY
interview with Ann Rmoney. Turns out she’s surprisingly honest there!
So ..what happened to the top of my question mark there???
StevoR, that’s a silly argument which would equally apply to every single professed Abrahamic religionist.
Forgetting the part about forgiveness, eh? And about how their wrathful, self-centered God is supposed to be bastion of goodness and a role model for all humanity?
Remember, rule of thumb: “Everything and it is opposite”. It is very hard to pin down how religionists should behave when the standards that they are supposed to hold themselves to are contradictory.
It absolutely does apply to every single professed Abrahamic religionist, which shows that none of them really, truly, deeply believe it (or have serious guilt complexes all the time). It’s the religion that’s silly, not the argument.
The “very devout man” is in even more trouble today. Let’s hope the surge of indignation behind Mitt Romney’s latest lies washes him away.
New York Times link.
Excerpt:
Toledo Blade link. Excerpt:
I am on Chrysler’s press mailing list thanks to past adventure book promotion deals. Today I received a press release from them detailing, among other bits of good news:
The best October sales since 2007
Their 31st consecutive month of sales gains
Jeep Wrangler and Jeep Patriot record sales for October
Plus a list of several awards won by Jeep. Of course, Chrysler confirms plans to add more than a thousand jobs at two USA plants.
Romney is so wrong that I think he may have gone full circle and met himself coming around again on the lying track.
More Republican fear mongering:
“If any Republican, conservative, independent journalist, pro-life activist, returning veteran, gun-rights activist, constitutionalist, Bible believer or critic of Obama thinks they will be safe… under this would-be despot, they had better think again.” — Joseph Farah of World Net Daily
More:
Ladies and gentlemen, we have escape velocity for the right wing. There are no tethers to reality.
The Associated Press is reporting the Mayor Bloomberg just endorsed President Obama for re-election.
Devoutly obligated to implement the Tea Party agenda — that’s my take on Mitt Romney. And I’m not alone is this assessment.
Excerpted from Carl Bernstein’s article on Mitt Romney’s Radicalism.
More evidence of Republican dirty trick: they don’t like reality, so they demand its withdrawal from the public sphere.
Talking Points Memo link.
Well that was interesting. I’ve heard of CRUTs and CRATs. IIRC, it can be used to sidestep death taxes while donating to your favorite causes.
I’m still really curious about how Romney managed to end up with a $100 million IRA in Bermuda when the annual payment limits are $5,000. I’m sure he did it legally by driving a truck full of cash through a loophole.
I could use one of those myself.
1. Romney has taken all position on everything at one time or another.
2. He and the Tea Party lie constantly about anything and everything.
No point in trying to figure out what he and they are saying.
We just have to guess. My guess is it will be a lot like Bushes Catastrophe as Romney loots the country and crashes the economy.
Ironically, Romney was the best of a bad lot. Satanorum wants to be a New Dark Age pope. Bachmann wants to hunt for commies and Moslems. Perry wants to know where in the hell he is and what in the hell is happening. And so on.
And blames the economic collapse on the Democrats, over-regulation and high taxes. Being conservative means never having to take responsibility for anything.