How Much Do the Candidates Donate, Pay in Taxes?

This Presidential Election campaign season, the mainstream media has paid a great deal of attention to candidate tax returns. Now, I’d like to join the conversation by looking at the candidates’ 2011 federal tax returns.

In this post, I’m not going to suggest that one candidate is better than the other. I’m certainly not going to endorse a candidate.

While we may disagree on what the numbers mean or whether they mean much of anything at all, I suspect we’ll all agree that the numbers are interesting to look at, at least for a few moments.

From the perspective of public policy, Barack Obama wants to limit tax deductions for charitable giving. For his part, Mitt Romney has hinted that he may also seek to limit the tax deduction for charitable giving but, so far, he has not offered specifics about where he stands on the details of tax policy.

So, I thought it would be worthwhile to review how much money each candidate has contributed to the US Treasury and to the nonprofit sector.

I’ll leave it to you to decide how relevant or important this information is to your voting decision or what you think the potential impact is for the nonprofit sector.

I’ve put together the following chart based on a Fox News report that looked at candidate tax filings for 2011:

 

CATEGORY

OBAMA

BIDEN

ROMNEY

RYAN

ADJUSTED GROSS INCOME

$789,674

$379,035

$13,696,851

$342,416

CHARITABLE DEDUCTION

$172,130

$5,540

$2,250,772

$12,991

CHARITABLE GIVING %

21.8%

1.5%

16.4%

3.8%

FEDERAL TAXES OWED

$162,074

$87,900

$1,935,708

$64,764

EFFECTIVE TAX RATE

20.5%

23.2%

14.1%

18.9%

GIVING + TAX %

42.3%

24.7%

30.5%

22.7%

 

The Obamas gave 21.8 percent of their adjusted gross income to charity while the Romney’s gave 16.4 percent. The figures for the Romneys do not include gifts made through their family foundation. Paul Ryan and his wife donated 3.8 percent while Joe Biden and his wife donated 1.5 percent.

When looking at dollars donated, the Romneys gave more than the other candidates combined. They gave $2,250,772. The Bidens gave the least, $5,540; they also earned much less, $379,035.

The Obamas and Romneys are setting a superb philanthropic example. While their public policy might be harmful to the nonprofit sector, at least the Obamas and Romneys have been personally quite generous to the sector.

While the mainstream media has made much of the fact that the Romneys paid an effective tax rate of 14.1 percent, it’s interesting to note that, when looking at taxes and donations combined, the Romneys paid/gave 30.5 percent while the Obamas paid/gave 42.3 percent. The rates paid/given by the Vice Presidential candidates were much less, 24.7 percent for the Bidens and 22.7 percent for the Ryans; the Ryans also earned the least with $342,416 in adjusted gross income.

So, what do these numbers mean, if anything? Or, perhaps I should ask, what do these numbers mean to you? What do you think the figures say about the candidates?

For my part, while I find the numbers interesting, I continue to believe that the election will be decided by much larger issues. It will certainly be interesting to see what the electorate decides. And, it will be interesting to see what the impact on the nonprofit sector will be.

That’s what Michael Rosen says… What do you say?

Advertisements

13 Comments to “How Much Do the Candidates Donate, Pay in Taxes?”

  1. I am curious to know what types of organizations they gave their money to. Did they give to organizations that served the poor? Did they give to PACs or chruches? Did they give to schools? Who benefited from their generosity? I think knowing that information would help me understand them more than the amounts.

    • Richard, thank you for your comment. I do think that how much people donate, particularly as a percentage of income, does say something about the individual. But, I also agree with you that it would be interesting to know where the candidates give. While it is difficult to get a tremendous amount of detail, here is what I have learned:

      The Romneys give a substantial sum to the church; the Mormon Church is the largest beneficiary of Romney-family philanthropy. Personally and through their family foundation, the Romney’s also support Brigham Young University, Weber State University, Harvard Business School, The United Way, AIDs Action, Center for Treatment of Pediatric MS, and a number of other organizations including those that focus on youth and health. You can learn more in this Forbes article: http://onforb.es/PK0g0s. You can also look at the Romney tax return here: http://bit.ly/Pcc35f.

      The Obamas have increased their philanthropy substantially in recent years. From 2002-2005, they donated between 0.4 percent and 4.6 percent of their income, according to The Washington Post. In 2011, the Obamas supported a number of nonprofit organizations including The Fisher House Foundation (benefitting military families), Boys and Girls Club of America, the American Red Cross, CARE, Habitat for Humanity, George Washington Hospital, and several other organizations. You can read more by looking on page 25 of the Obama tax return: http://bit.ly/Pcc35f.

      In addition to the Romney and Obama tax returns for all available years, you’ll also find returns for the Biden and Ryan families at http://bit.ly/Pcc35f. You’ll also be able to find tax returns for other presidential candidates from previous elections.

      I know that I have not completely answered your question, but I hope you find this glimpse of some value.

  2. Actually, that does help. It provides a glimpse of what each candidate’s priorities are.

    Romney’s tithing to the church does not surprise me, but I was not aware of the universities and other organizations that he supports. Obama’s support provides a good view of his priorities as well.

    Thanks for the further research.

  3. Interesting, but I think you’ve done the Romneys a great disservice by excluding their gifts to their Foundation from the calculation. (Not a politically-motivated comment; I’m not likely to vote for Mr. Romney.) Any reason that couldn’t be factored in?

    Factored in our not — both the Obamas and the Romneys are laudable examples of generosity.

    • Sheila, thank you for commenting and for your question. In my post, I did not exclude giving by the Romneys to their family foundation when making the calculation of their philanthropy. What I did exclude from the calculation was the money that the foundation donates to charities. I was interested in doing an apples-to-apples comparison of individual giving by the candidates and their spouses. However, in a follow-up comment, I did look at some of the nonprofits that benefitted from donations by the Romneys’ foundation.

      In summary, the calculations in my post do indeed include contributions made by the Romneys to their foundation. However, all of the calculations involve only personal giving. Therefore, the figures do not include gifts from the foundation.

      I hope this clarification has helped.

  4. We spend where our values are. It would be interesting to know what the candidates’ estate plans look like. Being in that business of planned giving, I think that legacy plans reveal the most. Estate plans are where we have the ultimate control– we can be generous with family, non-profits, and federal gov’t in any order we choose. More than while we are alive– thanks for another thought provoking and interesting post!

    • Laura, thank you for sharing your thoughts. I agree that it would be very interesting to know if the candidates have an estate plan that includes philanthropy and, if so, what organizations they will be supporting. Unfortunately, we’re not likely to ever have access to such information. At least we can get a look at their current giving.

      By the way, there was an interesting focus group study in the UK that found that people prefer to give to charities rather than have their estates give to the government through additional taxes because they simply trust charities to spend the money more wisely than government. That sentiment crossed political lines. I suspect that those who have great confidence in the wisdom of government will have less interest in tax avoidance strategies.

  5. Ref: UK study– very interesting. I have found that donors who do philanthropic planning do have specific aims in mind. We ask the question: What do you want your wealth to accomplish that will outlive you?

  6. Michael, something you forgot to include in this: The Romney’s only claimed a percentage of their total charitable deductions, so the amount you have is NOT the total giving, only what they chose to deduct. I believe he only claimed half, if the article in the Wall Street Journal was true.

    • Jodi, thank you for making an important point. I did not mention a number of important, interesting things in my post. I did not mention any giving for which the candidates had not claimed a deduction. I did not mention Jill Biden’s claim that she “donated” an extraordinary number of volunteer hours. I did not discuss how much money the Romney’s family foundation gives, though it would have helped us better understand the real reach of the family’s philanthropy.

      Regarding the true scope of Romney family philanthropy, it’s difficult to know. I haven’t seen any concrete documentation of their total giving. I’m not saying it doesn’t exist, just that I haven’t seen it. So, in an attempt to make an apples-to-apples comparison based upon concrete, reported numbers, I only talked about the giving for which the candidates have taken a personal deducation. Yes, that likely leaves some giving unmentioned. In the case of the Romney family, that might be quite substantial. Thank you for pointing that out.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: