Romney hasn't paid taxes since 1995

[rkt]

Breaking: Romney Paid Zero Taxes From 1996 To 2009

Harry Reid was right.  Bloomberg  finally cracked the story...
Using a tax shelter called a CRUT (charitable remainder unitrust)   that was held by the Church of Latter Day Saints (Mormons),  Mitt Romney was able to pay zero taxes (legally) every single year from 1996 to 2009.  Why did he

Comments

[anolinde]

I don't get it. So, he makes a donation to the church and gets a tax deduction for it. But what's the "stream of cash payments"? And how is the church's money declining? Is he making withdrawals from the trust? If so, wouldn't he simply have fewer tax deductions? And is the conclusion really that he's stealing from his own church - that is, we're to assume that the heads of the church aren't complicit?

Either way, this article is poorly written.

[anolinde]

Also, how does this mean that he's not paying taxes? Are the tax deductions equivalent to the amount of taxes he would have otherwise had to pay? I wish the article had half as much information about this as it did ellipses, lol.

[rex_dart]

I am not an economist and I don't make enough money to use tax shelters, so I might be wrong on things, but here goes.

This is a way of avoiding paying capital gains tax on an amount of money. Since the Mormon church doesn't have to pay taxes, the money is "donated" in that it's put into a trust where it can grow without being subject to capital gains tax. As part of this agreement, a percentage of the money in the account (eight percent in Romney's case) is paid out every year. Income tax does have to be paid on that portion of the money. It's not a deduction; it's just a way of avoiding/deferring a particular tax.

[anolinde]

Okay, that makes things clearer. Thank you. =)

[shhh_its_s3cr3t]

Yeah - not surprised here. Also won't be surprised that those who stan hard for him where I live will continue to stan for him. Hell, they're as callous and robotic as he is. Like goes for like. UGH

[rex_dart]

Check the source of the source, guys: this article is inaccurate. The story from Bloomberg is that until 2009 he'd been using a tax loophole that was closed in 1997 and which he was grandfathered into to avoid paying capital gains tax on a portion of his income. But the article clearly states that the amount in the CRUT was only $750,000 or so in 2001 and paid out 8% a year to the Romneys. That's not even six figures of his income.

That's not to say this isn't damaging, but there is nothing here to suggest that Romney paid NO taxes. In fact, he would have been taxed on that eight percent income since the tax shelter is only meant to allow money to grow without capital gains tax. It's a tax deferment.

[wonderpup]

agreed, this article doesn't make much sense.

[yeats]

thank you for explaining this...something didn't feel right to me but my math idiocy kicked in and i just assumed i was misinterpreting it.

[rex_dart]

I read both articles all the way through twice before I was like, "Okay, no, this is fucking wrong," and I STILL checked the comments on DailyKos to make sure I wasn't just being stupid.

[beetlebums]

Is there a better source for this?

[chaya]

The Bloomberg article linked and mentioned is accurate (as opposed to this, which, eh.)

[baked_goldfish]

Seconding the Bloomberg article. Although it's still a bit of an oversimplification to call it a tax deferral as they do - he waited out high capital gains rates, he's benefited from having a larger amount of capital to invest by not having to pay taxes on them when gains were realized, corpus payments are tax-free, the time value of money makes it so deferrals of this length become near-eliminations, etc. - but the Bloomberg article gives a better overview.

[lord_cellytron]

Well, I think I'm going to have a heart attack and die from that surprise