The election is only days away and we still know basically nil about Romney’s tax returns. (For our posts concerning Mitt’s evasion and avoidance, click here, here, here, here, here, or here.)
Bloomberg’s Jesse Drucker has now uncovered more startling tactics from the Republican presidential candidate, this time involving Romney’s church. Via the Freedom of Information Act, Drucker ascertained documents showing that Romney was using his Mormon church’s tax-exempt status to save himself from paying taxes. CJR reports:
Effectively, the Romneys put up a trust that pays them 8 percent of its assets a year until they die, at which point the Mormon church gets what’s left in the account. Congress restricted this tactic, the so-called charitable remainder trust, a year later after being abused by rich tax avoiders, but Romney’s was grandfathered in.
When Romney’s lawyers and accountants created it, the church was supposed to end up with just 8 percent of its assets, while Romney got 92 percent. But the investments haven’t been doing well, so Romney’s withdrawals, at 8 percent a year, have been steadily reducing the money in the trust, and Bloomberg quotes an expert saying the church will eventually get “probably close to nothing.” Romney makes out regardless while the other stakeholders—his church and the government—lose out. It’s basically the private-equity business model brought to tax planning.
