Romney's Charitable Remainder Unitrust

Well, yesterday we learned pretty much nothing new about Mitt Romney. Well, we learned that Harry Reid wasn't so far off when he questioned Mr. Romney's tax history (although we still haven't seen convincing evidence that Romney didn't paid any taxes in recent years). We learned that Mr. Romney's vast wealth is still mostly untouched by taxes. We also learned a new acronym, the one for the special vehicle into which Romney put quite a bit of financial resources: the Charitable Remainder Unitrust, or CRUT.

For those of you who don't know what a CRUT is, join the club. Even after this Bloomberg article on the Romneys' CRUT, I still don't quite understand what it is, other than a way that really rich people are able to basically stash their money in a charity and yet keep on earning tax free interest on it, and often--but not always--leaving a little something for the charity. In this case, Mr. Romney stashed his funds in the LDS Church, and it's looking like somewhere between 0% and 8% of the original value will be left over for the Church after Romney officially turns it over to them. But, in all honesty, and other than the CRUT details, we've known that all before today.

This is a helpful reminder of the reason we have taxes in the first place, and the reason we need them. Remember, conservatives always argue that if we just had lower taxes on the wealthy, those wealthy would be able to spend that money on some wise charitable project. The idea that if the rich (or 'job creators') had more money then they'd create more jobs, also flies in the face of the fact that Wall-Street has completely recovered under Obama. The more people complain about unemployment under Obama, during which time Wall-Street performed exceptionally well, the more they prove that 'trickle-down' economics are simply a thinly veiled excuse to benefit the rich at the expense of the poor. Lower taxes on the rich doesn't produce more jobs or give a dramatic increase in charity. Mitt Romney is a master at lowering his own taxes--legally, of course--and it doesn't really seem like the conservative prediction held true. Instead, with his pocketed tax dollars, he purchased a couple of Cadillacs, three houses valued at around $20 million, and a car elevator.

Now, let me be clear here. I'm not criticizing those purchases. I've certainly spent money on personal stuff that I could have given to charity, and I think most of us have. And the Book of Mormon teaches that we should help people achieve their wants as well as their needs (Mosiah 18:29, D&C 51:3, Alma 35:9, and D&C 82:17). I have no business criticizing their wants (just like conservatives have no business criticizing the wants of the poor among us). I'm just pointing out that the conservative prediction--lower their taxes and they'll be able to give more money to charity--doesn't seem to hold.

In this sense, it doesn't matter what the Romney's money went to, just that it didn't go to charity. And it clearly didn't. And, in fact, some of what did go to charity didn't really. It's hidden in a CRUT, which I will work into this post as many times as I can because it is such a delightful acronym. Again, I only learned of CRUTs recently, but the whole idea of tax havens just seems a little out of sync with the brunt of Mormon scriptural teachings about wealth. There's Jacob 2:17, for example:


And Doctrine and Covenants 49:20:

And the widow, with her mites, certainly didn't give as high a figure as Mr. Romney has to charity, but the Lord is clear in Luke 21:2-4:

Finally, it seems that some like to argue something along the lines of "Mr. Romney is just a harder worker and a smarter man than the rest, so it follows that he's richer than they are." This line of argument bothers me as well, because lifting the rich onto a high pedestal is roundly discouraged in the Book of Mormon. For example, in Helaman 7:26, Helaman's son Nephi denounces such a practice:


You can also see Jacob 2:13, Mosiah 4:17, and 3 Nephi 6:12 on the dangers of thinking that the rich are better than the poor in some way (for summaries of contemporary conservatives making this "richer=better" argument, see here, here, and here). But back to CRUTs and Mr. Romney. Here's the extent of the response from the Romney camp:

There's no doubt that this was entirely legal. So, what's the big deal? Romney protected his (enormous) wealth in a perfectly legal manner. We believe this is a big deal. While we are very worried about inequality, we've also suggested that it's not wealth that worries us, it's what is done with that wealth. The Book of Mormon teaches clearly how riches should be handled:
If Mr. Romney isn't that type of person, I'm not sure he's the type of person I'd like to see in charge of welfare payments to my poor brothers and sisters across the country. And, on a final note, a question: Mitt Romney seems to have exploited every loophole possible for a person of his wealth and position. Every single one. And each one has given him significant financial advantage. He now promises to close tax loopholes for people like him. So, my question is, Mr. Romney, if these loopholes are so bad, why did you so regularly go out of your way to take advantage of them? Can we really trust that you dislike them, or are you just vaguely pretending you are against them, when in reality you've spent decades of your life learning everything about them. In other words, you've drawn far away from them with your 'presidential candidate' lips, but they seem close to the thoughts and intents of your 'financial' heart.

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