The Inequities with Tithing

According to Sam Brunson writing for Times and Seasons (18 Jan 2012):

ABC broke the news:  Mitt Romney has donated millions of dollars worth of stock to the Mormon church. SEC filings disclose that a Bain partner donated $1.9 million of Burger King stock to the Church; in addition, the Church has received stock of other Bain holdings, including Domino’s, DDi, Innophos, and the parent company of AMC Theaters.

But why? Why would Romney give the Church equity stakes in bad fast-food chains, second-rate pizza chains, and other such holdings?

So why did Mitt Romney do this?  Why does he contribute stock to the LDS Church?  He does it for tax reasons which are explained in the T&S article.  In essence, he gets the government to assume some (or most) of his tithing obligation. 

The “Taxguy” commenting on the above T&S post wonders about the inequity of it all.

I think there is a much bigger deal going on here as far as the Church is concerned.  Romney’s effective tithing rate may be as low as 1% after tax benefits.  A typical wealthy person with a Federal and State tax deduction may pay tithing at an effective tithing rate of 5%.  The widow and her mite with only standard tax deductions pays tithing at an effective tithing rate of 10%.

So, the person who has the least to pay, pays at the highest effective rate.  This is so unfair to the poor and needy.

I know this is how the tax code works, but is it how the Church should work – shouldn’t we require some balancing of this?  As an individual, do we really feel in compliance if we are getting 50% or 90% of our tithing right back?  What kind of sacrifice is that?

“Naismith” commenting on the same article brought up a slightly different issue on the same general subject:

One of the big plusses for well-to-do US Americans is that they get health insurance through their employer and generally do not pay tithing on the (usually larger) portion of premiums paid by the employer, since those dollars never actually came through your hands (but save significantly on health care costs throughout the year). I think the average employer premium for a family plan is about $12,000 per year.

Should we be paying taxes or tithing on those benefits?

So if you are poor or self-employed, you may have a higher tithing obligation than someone who is salaried with health benefits.  Again the poor come out on the short end of the stick.

Tithing serves two general purposes:  (1) it keeps the church functioning and (2) it is a sacrifice for the giver.  But what kind of a sacrifice is it if the government makes the majority of the contribution?

It looks like the law of tithing could use some fine tuning to make it more equitable for the poor and more of a real sacrifice for the wealthier givers.  It is bad enough that the 1 percent get unnecessary tax benefits, but to also get a break on tithing seems particularly onerous.

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7 Responses to The Inequities with Tithing

  1. Spencer says:

    It’s also simply a commandment. Like in Mark 12:41-44. Percentages aside, in absolute dollar amounts, what the affluent donate (tax-effected or not) is much greater than what the poor referenced in this article pay. The point is that those who ignore the visibility to the world (or other church members) of their effective tithing percentage and focus on how the Lord views their payment will receive their reward. If people choose to donate equity in failing companies and feel confident that they are full tithe payers, that is between them and the Lord. I would argue that the true effective tax rate for the “poor” is negative–perhaps infinitely negative–, once the non-monetary and otherwise invisible benefits (blessings) provided by the Lord are accounted for. Although many people choose not to believe such a statement, tithing is not about the money. I don’t think we should be worrying about “equity” in terms of effective tithing percentage paid. If one is so concerned, simply pay your 10% and go about your day.

  2. It is also important to note that the question asked in tithing settlement is not…”Let me see your tax returns” but “are you a full tithe payer?”

    The church defines tithing as ten percent of the income, but leaves it to the individual’s conscience to determine how to spend that. I know many GA’s who have paid their ten on their income, but who pay far more just to make sure. If a person wishes to pay their tithe after taxes, as only the net is “income” that’s entirely up to them. Sometimes some members are too hard on themselves and sometimes they are too soft, but the mechanism of individual conscience can be applied.

    • Spencer says:

      Very good point of view. The church doesn’t even go so far as to use the word “income” but rather “increase.” I like how you use the term “individual conscience” to describe the situation.

  3. roger hansen says:

    I think there are some issues here which the above commentors have glossed over. For example, should we be paying tithing by simply moving money from one column to another on a spreadsheet? Should the “1 percent” have the ability to shift major bucks from the federal treasury to a charitable organization? Someone with Romney’s wealth can shift millions of potential tax dollars to the Mormon Church. Is this really what tithing is about? I think that paying 10 percent is partly about sacrifice. Where is the sacrifice?

    The real sacrifice is the widow who pays 10 percent on her SS check, and continues to live in poverty. She is not going to make the cover of Time Magazine (or the Ensign for that matter), but she is really sacrificing. The comment about the poor getting much more than they contribute (via non-monetary benefits) make it seem like tithing is paying for blessings. That is not something I believe in.

    All I’m suggesting in that church leaders (any church with a tithe), come up with a really equitable definition of tithe, given the current environment in the United States (and in other countries, as appropriate). It needs to be fair to everybody. The rich and the poor alike. The rich get enough of a break now with their taxes, let’s quit extending those same breaks to their tithing contributions.

    • Spencer says:

      Please don’t misunderstand my thoughts. Of course tithing isn’t about paying for blessings. That’s not something I believe in either. I’m simply saying that money alone is not the only way to look at tithing. Tithing is about being obedient, one-on-one, with the Lord’s commandment. Plain and simple. The Lord will judge what is “fair” on His terms. What do we do as tax laws change over time? Keep changing how we feel the law of tithing should be applied? There are literally countless unique financial circumstances that would render any attempt to adopt a “fairness” policy irrelevant. I like what Travis said about this being an individual deal. It really is.

  4. roger hansen says:

    I think what constitutes a “full” tithe could be described better. “Gross” or “net,” and then define what the term means. “What is a fair percent of federal and state participation in a tithing contribution?” could also be suggested. I agree that nailing it down too tight is impossible. The “sacrifice” component of the tithe needs to be emphasized more.

    I wonder what will happen when Romney releases his tax returns? I think most people will initially be interested in seeing what he earns. However, I wonder what the reaction will be if he uses a lot of tax loop holes or if the Federal government is making the majority of his tithing contributions. Will the general public feel confortable with large sums of potential Federal money being transferred to LDS Church coffers. Particularly since the Church leadership is not transparent with how the money is spent.

  5. Roger, why create such a narrow definition that doesn’t apply to the disparate circumstances of various governments and cultures? Why not just leave it to the discretion of the members to interpret what “10 percent of your increase” means? What benefits would there be? When I lived in Utah, my effective tax rate after all deductions was about 12%, whereas here in Norway my effective tax rate is about 40%. I would prefer to be given the discretion and responsibility of handling tithing according to the various circumstances I find myself in, not having every trifle dictated to me.

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