The trouble with Philanthropy
Who could ever oppose philanthropy? Well, er, TJN doesn’t oppose it. But it does make us a little anxious. British businessman Sir Tom Hunter announced recently that he would donate a billion pounds (2 billion dollars) to charity. Among the many people who noticed this was Polly Toynbee, a columnist for the Guardian newspaper, who feels a little queasy about the idea that their donations should be free of tax.
If the rich tire of one of their homes, which has no doubt risen vastly in value, they can give it to charity and pay no capital gains tax. Ditto any shares they donate.
But are tax breaks a good idea? All that capital gains tax would otherwise go into the exchequer to be spent according to the democratic decision of taxpayers. Instead the taxpayer sees their own money purloined and spent at the whim of the giver. Every time anyone donates to a cat sanctuary or cruelty to dogs in Japan, the taxpayer is obliged to contribute another 28% on top.
Her article about the pitfalls of charity is well worth reading. As she says, givers can direct their money exactly where they want. No doubt we'd all like to do that with our taxes, but the better way is to elect a government to spend it as rationally and accountably as it can. And this is the crux of a very important matter, for as we have remarked recently, the process of taxation is one of the most important foundations of accountable societies. Polly Toynbee advocates a better way for the wealthy to contribute to society.
Quite a small group of powerful clan chiefs of the City could change the tax-averse culture of the rich. They could shame the non-domiciled, the private-equity tax evaders, the trust fund inheritance tax cheats and their whole wicked tribe of tax advisers bent on denying the state as much money as possible.
Once again, quite right Polly.
If the rich tire of one of their homes, which has no doubt risen vastly in value, they can give it to charity and pay no capital gains tax. Ditto any shares they donate.
But are tax breaks a good idea? All that capital gains tax would otherwise go into the exchequer to be spent according to the democratic decision of taxpayers. Instead the taxpayer sees their own money purloined and spent at the whim of the giver. Every time anyone donates to a cat sanctuary or cruelty to dogs in Japan, the taxpayer is obliged to contribute another 28% on top.
Her article about the pitfalls of charity is well worth reading. As she says, givers can direct their money exactly where they want. No doubt we'd all like to do that with our taxes, but the better way is to elect a government to spend it as rationally and accountably as it can. And this is the crux of a very important matter, for as we have remarked recently, the process of taxation is one of the most important foundations of accountable societies. Polly Toynbee advocates a better way for the wealthy to contribute to society.
Quite a small group of powerful clan chiefs of the City could change the tax-averse culture of the rich. They could shame the non-domiciled, the private-equity tax evaders, the trust fund inheritance tax cheats and their whole wicked tribe of tax advisers bent on denying the state as much money as possible.
Once again, quite right Polly.
posted by TJN at 2:22 am
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