Mitt Romney's Vast Charitable Giving
The big news from tax returns
By JOHN PODHORETZ
Last Updated: 12:35 AM, September 22, 2012
Posted: 11:23 PM, September 21, 2012
We learned yesterday that last year Mitt Romney paid $1.9 million in taxes on an income of $14 million — and gave $4 million to charity.
The year before, he made $21.6 million, paid $3 million in taxes and gave $3 million to charity.
So, to recap: Mitt Romney has, in the past two years, paid almost $5 million in taxes while giving away $7 million. And, as he said, he has paid the taxes he was supposed to pay according to the laws of the United States, which is all that is required — legally, morally and practically — of anyone.
If you’ve been reading my columns for the past couple of years, you know I’m perfectly capable of being critical of Romney. I did so the other day, and radio host Mark Levin called me a “trash-mouther” who was “giving aid and comfort to Obama.”
But the release of these tax records leaves no doubt about one thing: Mitt Romney is an extraordinarily, remarkably, astonishingly generous man. A good man. Maybe even a great man.
That is all. There is no “but.” Anyone who says otherwise is ignorant, stupid or a liar.
It’s important to talk about how charitable deductions work, because there is great confusion about them and their effect on the amount people pay in tax as a result.
You will hear it said, by people who are either ignorant or have an axe to grind, that the charitable deduction is a tax shelter. It is anything but.
Shelters are investments that work to protect money from being taxed by the government. In effect, every dollar in them is put there either so that it can earn money or so that it can be used to lower a person’s tax burden.
Now consider the dollar given to charity. If you’re Mitt Romney, your dollar would be taxed at a rate of 35 percent by the federal government — the highest rate. When you give that dollar to charity, you are, in effect, excused from paying 35 cents of it to the government.
But here’s the key: You don’t get the other 65 cents back.
If you simply kept that dollar for yourself and paid tax on it, you’d still have 65 cents of it in the bank.
By giving that dollar away to charity, you lose that 65 cents entirely. It goes to the charity, as does the 35 cents you’d have paid to the IRS.
It’s likely, given these numbers, that over the past 20 years the Romneys have donated more than $50 million to charity. Do the math: Under current tax law, if he’d kept the money, he’d have $30 million more than he has now. (That’s extremely inexact, but you get the idea.)
As a member of the Mormon church, Romney is instructed to tithe 10 percent of his income. That’s in keeping with most charitable giving: Religious institutions get about one-third of all contributions, according to The American magazine.
In 2011, his tithe would have been $1.4 million — which means in that year alone he gave more than twice as much to other charities through his own foundation and through other means.
This may be a reflection of his deep faith. As Arthur C. Brooks, the head of the American Enterprise Institute, has written, “Religious people are more charitable with secular causes, too.
“For example, in 2000, religious people were 10 percentage points more likely than secularists to give money to explicitly nonreligious charities, and 21 points more likely to volunteer. The value of the average religious household’s gifts to nonreligious charities was 14 percent higher than that of the average secular household.”
Brooks’ groundbreaking academic work on charity at Syracuse University (presented in his 2006 book, “Who Really Cares”) demonstrated, in stunning fashion, that conservatives are far more likely to be generous with their own dollars than liberals.
“Strong families, church attendance, earned income (as opposed to state-subsidized income) and the belief that individuals, not government, offer the best solution to social ills — all of these factors determine how likely one is to give,” Brooks wrote.
Conservatives have long been suspicious that Romney isn’t truly one of them. The release of his tax returns should settle the matter once and for all: He’s not only to be accepted, but admired and emulated — and by liberals as well as conservatives.
jpodhoretz@gmail.com
nypost.com |
