By Jueseppi B.
The President of the United States released his tax returns for 2011. He made just over $700K last year, and paid just over $123K in taxes. Thats in the 23% category.
His charitable contributions were $just over $172K, which is 22% of his total income for 2011.
Willard Mitt Romney has yet to release HIS 2011 tax returns so lets go to a comparison between Romney & POTUS Obama from 2010.
When Joe Biden went to New Hampshire on Thursday to attack Mitt Romney’s tax proposals, the Romney campaign greeted Biden by attacking President Barack Obama’s charitable giving rate. On a campaign conference call with reporters, former New Hampshire Gov. John Sununu, a Romney backer, said the following:
In their own private lives, it would be nice to see some contributions to charity that are significant out of President Obama and Joe Biden. I think it is an interesting contrast to make with the presidential candidate the Republicans have now put together a nomination for, that is Mitt Romney, former Governor Romney, who gave almost 15% of his income last year to charity.
The problem with this attack is that the contrast is not all that interesting, at least not in the way that Sununu suggested. As a percentage of gross income, Barack and Michelle Obama gave 14% of their income to charity in 2010. That happens to be the same percentage that Mitt and Ann Romney gave to charity in the same year. The Romney charity number ($2,983,374) is a lot bigger than the Obama charity number ($245,075), but that is simply because the Romney family made 12.5 times as much as the Obama family in 2010.
The charitable giving rates matter to the Romney campaign because Romney paid just 14% of his income in federal taxes in 2010, much lower than many other wealthy individuals. The reason is that most of his income comes from investments, which are generally taxed at a lower rate. (By contrast, the Obamas paid about 26% in federal taxes in 2010, and the Bidens paid 23%.) At a debate earlier this year, Romney argued that he should not be judged for his federal tax rate, but by the combination of his federal tax rate and his charitable giving rate. “My taxes, plus my charitable contributions, this year, 2011, will be about 40 percent,” Romney said.
It is too early to compare that figure to Obama’s or Biden’s, since they have not yet released their 2011 returns. But we can do the comparison for 2010, and it is not a favorable one for Romney. By my calculation, the Obamas paid 40% of their money in both federal taxes and charitable giving in 2010, while the Romneys paid a combined rate of 28%. The Bidens paid a combined rate of 24%.
Some conservative critics of the President have argued that the charitable giving of Obama in office matters less than the charitable giving of Obama out of office. Between 2000 and 2004, the Obamas gave between 0.4% and 1.4% of their money to charity, according to the Wall Street Journal. This is presumably less than the Romney’s were giving at the time, since practicing Mormons are expected to tithe 10% of their income to the church annually. But we don’t know that for sure, since Romney has declined to release his tax returns for those years.
But it is also true that, like the Bidens today, the Obamas of the early 2000s were not a particularly wealthy family. The family money comes almost entirely from the sales of Obama’s books, which only took off after Obama was elected to the Senate in 2004. In recent years, however, Obama has made some strides to make up for lost time. In 2009, for instance, he donated his entire $1.4 million Nobel Prize check to charity, in addition to 6% of his annual income that year. That works out to about 25% of the Obamas’ net income in 2009 that went to charity, well more than the 14% that Romney gave to charity in 2010.
Further complicating matters is the fact that the Romneys have set up a separate charitable foundation, which gives away money independently. In 2010, the foundation had more than $10 million in assets, which is probably a few percentage points of the Romney family net worth, which has been estimated as high as $250 million.
So who wins the more charitable candidate contest? It depends on how you count it, and the public data is incomplete. But the gist is this: In recent years, the Obamas have been at least as charitable, if not more charitable, than the Romneys, while at the same time paying a greater share of their income in federal taxes. Romney, who has probably paid far less of a share of his income in federal taxes over his lifetime, has also probably given a larger lifetime share of his earnings to charity, with much of that money going to his church. But for most observers, the details will probably matter less than the big picture: Both families are wealthy, and neither family is stingy. In recent years, they have both given far more to charity than the averages for their income brackets.
On Friday, the White House released the 2011 tax returns for the Obamas and Bidens. The Obamas made $789,674 in 2011, gave away 22% to charity and paid an effective federal income tax rate of 20.5%. The Bidens made $379,035, gave 1.4% to charity and paid 23% in federal income taxes.
Romney has not released his 2011 return, but he has released an estimation of that return. It shows that the Romneys made $20,901,075 in 2011, gave 19% away to charity and paid 16% in federal taxes.
If those numbers stand, and not counting the Romney independent charitable foundation, the Obamas would therefore win the who-is-more-charitable contest for 2011 by a couple percentage points of total income. The Obamas also paid a higher percentage of their income in federal taxes, since less of the income came from investments, which are taxed at a lower rate.