Aug 07 2012
With a net income of $21.6 million according to 2010 tax records, Republican Presidential Candidate Mitt Romney is the third richest person to run for U.S. president. Romney reluctantly released his 2010 tax records and an estimate of his 2011 taxes after considerable public pressure. Based on the released tax returns, financial analysts say the prospective Republican candidate donated $3 million to charity, eighty percent of which were given to the Church of Latter Day Saints. As a practicing Mormon, Romney is required to tithe 10 percent of his income to the Church. According to the Securities and Exchange Commission between 1997 to 2008, Romney’s donations were given primarily in the form of stock options from companies such as Burger King and Domino’s Pizza.
In addition to a significant tax break for Romney, this form of donation allowed the Mormon Church to sell the stock without paying any capital gains tax. Although religious organizations do not legally have to disclose their financial information, a recent investigation by Reuters estimated that the Church of Latter Day Saints is worth close to $40 billion and collects close to $8 billion in tithes every year. Until the 1990s the money the church collected in tithes was held at the local level, but now it is sent directly to the church’s Salt Lake City headquarters, which keeps no financial accounting of the funds. With the benefits of significant tax advantages for religious organizations, the Mormon Church has amassed a huge financial empire. Just this past year the Church spent $2 billion on a mega mall in downtown Salt Lake City while only having given, according to the church’s own records, $1.3 billion in humanitarian aid over the last 25 years.
GUEST: Caroline Winter, a reporter for Bloomberg Business week and author of the recent article How the Mormons Make Money.