Mormons, Increase, and Gifts

March 13, 2012 | 24 comments
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An unscientific poll:

(Poll inspiration here.)

24 Responses to Mormons, Increase, and Gifts

  1. Bryan in VA on March 13, 2012 at 8:34 pm

    Some 35 years ago my seminary teacher (and former bishop FWIW) said he researched this question and reported to our class that tithing was not required on gifts. I don’t know his sources, but I’ve always gone with that position and have never heard either side taught in Church.

  2. Michelle on March 13, 2012 at 10:41 pm

    I don’t pay tithing on cash gifts, and here’s why: if someone gave me a laptop, I wouldn’t pay tithing on the laptop, even though technically it’s part of my “increase”. So if someone (or multiple people) gave me the money so that I could buy the laptop on my own, is there really a difference? I don’t think so, so I don’t pay tithing on gifts.

  3. Mark D. on March 14, 2012 at 12:00 am

    My position is that tithing is the most efficient when each unit of GDP is only tithed once. In an ideal world tithing revenues should average 10% of GDP, and all real income should be tithed equally. A gift, naturally, is not real income.

    Alternatively, if we were to adopt a convention where gifts were tithing deductible to the giver (it is a reduction in one’s increase right?) then it would be right and proper for the receiver to tithe the increase.

    On the other hand, tithing refunds for those that experience a negative increase during the year are probably going to be long in coming, so unless one were to hold those over for future years, it is probably best to drop the idea that it should be obligatory to pay tithing on cash gifts received. Don’t let that persuade you if you feel otherwise though (smile).

  4. Julie on March 14, 2012 at 2:32 am

    I don’t think there is one right answer. Tithing should really always be a matter between you and the Lord.

    For me personally, with my math/finances mind, I think I could become fixated on the economics of it and slip towards a cheap attitude towards God that I don’t want to have. So I always try to err on the side of “overpaying.” I think it helps me to recognize that this is how God gives to me: in “good measure, pressed down, shaken together, and running over.”

  5. Steven on March 14, 2012 at 9:02 am

    The church handbook says increase is interpreted to mean income. A gift of cash is not income, it’s a gift, the same way we receive gifts at Christmas and birthdays. My overall approach is that if it’s not reportable to the IRS as income, then it’s not subject to tithing. If someone wants to get real picky, then think of all the “gifts” we receive. If someone invites you over to dinner, that is a “gift” of food the value of which you would tithe. If someone gives you a ride to church, they are burning gas and incurring wear and tear on their vehicle. How do you put a price on that? Anyway, I know some people differentiate between cash gifts versus other forms of gifts, but I don’t. I don’t think Heavenly Father is worried about tithing the $10 birthday cash you get from grandma.

  6. Sam Brunson on March 14, 2012 at 9:19 am

    A gift of cash is not income, it’s a gift

    I think that’s a pretty common intuition (based on my poll, currently, 2/3 of respondents don’t tithe cash gifts). But it’s not obvious why we wouldn’t consider gifts to be tithe-able income. Saying that a gift of cash is not income, it’s a gift, essentially begs the question; whether a gift is income or not depends on your definition of “income.”

    That is, if you define “income” as “things included in gross income under the Internal Revenue Code,” then gifts are not income. If, however, you look at a Haig-Simons definition of income, gifts certainly do constitute income.

    In any event, though, I don’t want to put my thumb on the scale (I wasn’t the first to respond to the poll); I actually think there is some value in the ambiguity, and I’ll probably follow this up at some point with a substantive post. But, in the meantime, thanks to everyone who has, and who will, respond–I’m finding the responses remarkably interesting.

  7. anon on March 14, 2012 at 3:41 pm

    I always feel like I should tithe on cash gifts. They represent an increase in the amount of money I have. I even paid tithing on a cash loan once. I’ve only done this the one time, and I know it sounds crazy. It was a loan from a friend, and I was desperate (close to being homeless). The loan was a literal godsend as far as I could tell. Anyway, I found I couldn’t withhold that 10%, I so wanted to express my gratitude. When I was in a position to start paying back the money, my friend, who was very rich, insisted I keep it as a gift. (He knew nothing of the tithe paying.) This ending is way too saccharine, but that’s what happened. (Oh, and I don’t necessarily attribute that outcome to the fact that I paid tithing on the loan. I don’t pay tithing in anticipation of blessings. I just think it’s the right thing to do.)

  8. Paul on March 14, 2012 at 3:45 pm

    I’m not sure I’ve received many cash gifts as an adult. As a child, I was encouraged by my folks to tithe cash gifts at birthdays and Christmas, but I suspect more so I would get in the habit of paying tithing more than anything.

    (I remember once receiving $111.11 from my father so I would have $100 left over after tithing. He had already tithed the money, but he wanted me to learn to tithe as well, and to have the $100.)

  9. Annonymous on March 15, 2012 at 8:23 am

    All of my (young) children’s money is double tithed, really for teaching purposes only as in the above examples. I’m pretty sure cash gifts (and really all gifts) are subject to tax, it just is not enforced. In the end, it doesn’t matter what the government asks for. The Lord has asked for ten percent, and I’d rather get the extra blessings from paying too much than find myself on the short end of the accounting.

  10. D on March 15, 2012 at 8:26 am

    Like Bryan in the comments above, I was also taught that tithing wasn’t required on gifts…although I have to admit that I have tithed on certain presents that I’ve received, simply because it felt right to me. I think Julie’s response is very wise…

  11. Sam Brunson on March 15, 2012 at 9:38 am

    I’m pretty sure cash gifts (and really all gifts) are subject to tax

    Actually, as I said in comment 6, the tax law currently says that gifts are not included in gross income, and are therefore not taxable; it’s not an enforcement problem. (It’s also worth noting that gifts could potentially be subject to the gift tax, but I’m not wealthy enough to give a gift large enough that the gift tax would kick in.)

  12. D2 on March 15, 2012 at 9:42 am

    What about paying tithing on Tax Returns? While that money has already been tithed, it is an increase to us when we get it back. That’s a quandary I’m faced with each year.

  13. Mark D. on March 15, 2012 at 10:16 am

    Suppose, for example, person 1 earns $1000, pays tithing on it and gives the remainder to person 2, who pays tithing on that, and gives the remainder to person 3, and so on, until you stop the process with person 10. Person ten will end up with about $350 and the other $650 will have been paid in tithing to the church.

    If paying tithing on cash gifts is obligatory, the church effectively requires 65% of the original amount to be paid in tithing. That seems a little excessive, if you consider that if the original person just spent the remainder, the church would only collect the normal 10%.

    Not only that, such a policy (if it were a policy) actively discourages individuals from giving money to others. Is that economically, socially, and spiritually efficient in the broad scheme of things? Or does it rather promote selfishness, materialism, and instant gratification?

  14. Peter LLC on March 15, 2012 at 11:46 am

    What about paying tithing on Tax Returns? While that money has already been tithed, it is an increase to us when we get it back.

    If income tax returns on income that has already been tithed can be considered an increase, then so can the change you get at the grocery store when you break a $100 bill.

  15. Sam Brunson on March 15, 2012 at 2:11 pm

    Mark D., but where does that differ from the person (presumably in a heavily-Mormon community) who earns $1,000, tithes, and uses the remaining $900 to pay her LDS attorney, who tithes and uses the remainder to pay her LDS piano teacher, who tithes, etc.? Either way, as the money trades hands, a portion is tithed at every step, diminishing the remaining amount.

  16. Adam G. on March 15, 2012 at 2:42 pm

    My parents had us tithe cash gifts when we were kids to learn us, so that’s probably why I usually tithe cash gifts today.’

    On the other hand, I get irritated when I give someone a cash gift and they tithe it. My reasoning is that I meant that money for their benefit, if I’d wanted to benefit them less and benefit the Church more, I would have given the money directly to the Church.

  17. Adam G. on March 15, 2012 at 2:43 pm

    If you tithe gross, I don’t see the sense of tithing income tax returns. If you tithe net, I do.

  18. Mark D. on March 15, 2012 at 4:00 pm

    where does that differ from the person…who earns $1,000, tithes, and uses the remaining $900 to pay her LDS attorney, who tithes and uses the remainder to pay her LDS piano teacher, who tithes, etc.? Either way, as the money trades hands, a portion is tithed at every step, diminishing the remaining amount

    The difference is that all of that income was earned, i.e. it is part of the GDP. The church has a reasonable moral claim to ten percent of earnings. It is a claim to ten percent of monetary transfers that is unsustainable.

    A gift is not earnings, it does not represent part of the GDP, it is merely a transfer of consumption from one party to another, and tithing it each step of the way is counterproductive.

    For example, suppose a parent earns $1000, pays tithing on that, and spends the remainder on food for his or her family. Should each of the children pay tithing on the value of the food that they eat? That way the church would receive almost 20% of the parents earnings instead of 10%. Is that a good policy?

  19. Sam Brunson on March 15, 2012 at 4:12 pm

    The difference is that all of that income was earned

    That’s fair, but the D&C uses the word “increase”; both earned and unearned income could reasonably be interpreted as “increase.” And I’m not convinced that economic efficiency underlies tithing.

    I’m not arguing against you; I’m indifferent as to what others tithe on (except, of course, that I’m curious). I am interested, though, in why we think of income as being subject to tithing or not, though ultimately, I’d guess it’s more of a gut reaction than anything. (Though, of course, I’m happy to be proven wrong.)

  20. taxes on March 15, 2012 at 4:20 pm

    Re #14 and tithing tax returns…

    What about the earned income credit? Child tax credit? Some receive more in refund than they ever pay in.

  21. Mark D. on March 15, 2012 at 6:54 pm

    Sam B, Where does it say that if your neighbor gives you some of his grain (that he has already tithed) that you need to pay tithing again? Or that the children who eat at your table, or the guests who sleep in your house, or the guests at the feasts that you host, all need to tithe those gifts?

    I don’t know if there is a single example in the scriptures of the same grain, or increase in cattle, or manna from heaven being tithed more than once. We could have a system, of course, where grain that you give to someone else doesn’t count as increase to you, but rather as increase to them. Other than the accounting difficulties, the church would still receive 10% of the crop, right?

    Similarly, are you aware of any shopkeeper anywhere who counts net receipts as titheable income? Why not? It is gross income to them is it not? Inevitably every such person tithes on net business income, not gross business income. But why worry about economic efficiency? If their gross margins are not high enough to pay ten percent of receipts in the form of tithing, they should find a better business model, no? That way we can make sure that the church collects about 50% of GDP instead of 10%. Every step in the supply chain, cha ching.

  22. Adam G. on March 18, 2012 at 10:01 am

    Mark D.,
    no need to be inflamed. People who do pay on gifts haven’t wrecked the economy and no one in this thread or elsewhere is calling for the interpretation of increase that you appear to be afraid of.

  23. Daniel on March 23, 2012 at 7:13 pm

    Given, that at the end of the day, money has no intrinsic value and is only a tool for simplifying the exchange of goods – which would have “traditionally” been tithed, I pay tithing on any exchange of money that allows me to buy goods whether that increase came from my labours or not.
    If at the end of the day I’ve overpaid, so be it, at least the Lord’s work has progressed.

  24. Adam on March 27, 2012 at 9:54 am

    Increase is really your personal “profit” or the money you have left over after expenses. So if you want to pay a scriptural (D&C-based) tithe, it’s actually going to cost you a lot less than you’re paying now (10% before expenses).

    In that case, cash gifts would be tithed, but your overall tithing would be a lot less.