And Now, Being Charitable Is Bad
As Frankenstorm and its aftermath dominate the news, even one week before a presidential election, there has been a Mormon related story brewing. We’ve ignored it for a couple of days because it seemed only to be amongst the fringe, but as of this morning it has been so oft repeated – even if still in the lesser followed zone, that it bears some analysis. The basic theme is that Romney is using his faith to dodge taxes. I have seen the story at least a dozen times, and I link here to a version on a website dedicated to charitable causes becasue of the extraordinary irony.
The meme started with Bloomberg, and it concerns something called a “charitable remainder unitrust,” or CRUT. Here is how Bloomberg describes it, which is way down in the story:
When individuals fund a charitable remainder unitrust, or “CRUT,” they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.
This sounds very reasonable, just another mechanism by which our tax code enables and favors charitable giving. This is something that our tax code has done pretty much since we amended the constitution to allow for income taxes. It is part of keeping government limited. But in the age of big government, or at least what the few remaining Obama supporters think is the age of big government, giving to charity is not a social benefit, it is avoiding taxes that the government could use for perceived social benefit. Goodness gracious, we cannot let people give voluntarily and charitably when we can use coercion to take their money from them.
But, of course, this meme has a much more sinister air than that. Bloomberg interviews “Jonathan Blattmachr, a trusts and estates lawyer who set up hundreds of such vehicles in the 1990s.”:
“The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation,” Blattmachr said. Despite the name, giving a gift or getting a charitable deduction “is just a throwaway,” he said. “I used to structure them so the value dedicated to charity was as close to zero as possible without being zero.”
Well, I am sure an uncharitable soul would do that, using the mechanism more as tax dodge than charity, but is that what Mitt Romney is doing? Again from the Bloomberg piece:
At the same time he is benefiting, the trust will probably leave the church with less than what current law requires, according to tax returns obtained by Bloomberg this month through a Freedom of Information Act request.
What they fail to mention is that the CRUT was established before the current limitations were set and was legally conforming when established and is therefore grandfathered.
And, of course, there is the “sinister air” that the beneficiary of the CRUT is the Mormon church. It would be fascinating to see this same thing about a Christian of a different stripe. Most non-religious lefties, which is most lefties these days, do not consider religious giving as real charitable giving. One is forced to wonder if this is really a Mormon shot or a generic religion shot in which Mormonism is simply the target du jour.
Buried very deep in the Bloomberg piece is this goody:
Paul Comstock, a financial adviser to LDS Philanthropies, an arm of the Mormon Church, said that while he wasn’t familiar with the trust, Romney and his trustee might arrange to compensate the church for the dwindling amount with other gifts.
“It may be that they’ve made provisions for the charity someplace else that will make up for what this isn’t going to give them,” Comstock said.
Oh gee, you think? I don’t have the time to do the math, but for starters it is well established that the Romney’s tithe on their income which would include the benefit they receive from the CRUT. I do not have time to do the math, but theoretically and properly managed such a trust with tithing on the pay-outs could result in a far greater contribution to the charity in question than minimizing the pay-outs and leaving a large remainder. What I do know is that regardless of how the money gets to the church, the Romney’s charitable giving is extraordinary and the sums are staggering.
But, of course, most people are not going to get into the long grass like this. Most people are going to see the headlines and the lede and simply assume the Romney’s are “pretending” to give to the church while merely dodging taxes. So if we are going to cut to the chase, let’s cut to the chase. This goes back to the snark I started with.
There is a battle in the early reconnaissance stages, in the guise of how we care for “the least of these,” between the government and charity. As government continues to take more and more, presumably to provide such care, though bureaucracy involved makes government the least efficient form of such redistributive caring imaginable, they are setting their eyes on the money that goes to charities that provide such care far more efficiently. What truly saddens me about such is that it kills the charitable impulse.
You see, charity is not just about the care provided – it is about the willful giving. We are better people when we give willingly. We are turned miserly when our money is taken from us by the force of government, even if it is done so in the name of such care. I am sure we have all experienced the happiness that comes with writing that check to our favorite cause, and the resentment that builds when we write that tax check. (I’m paying my property taxes today – and working very hard to avoid the resentment – it’s a BIG check.) Which would you rather have, a nation of happy cheerful givers or a nation of resentful, miserly taxpayers?
Posted in character, News Media Bias, Understanding Religion | 4 Comments » |
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