I have read the reports today on donor and charity back lashes on the cap on giving to charities to be applied to the most wealthy giving more than £200,000 a year.
I am not surprised to hear that UNICEF is amongst the charities complaining. I am sure there will be some other aid agencies in the same camp. And there's good reason for that.
You see, they're in the aid business. It's been going on for over sixty years now. There are a fair number of people who have made whole careers out of it. And one thing they're definitely not inclined to do is ask why they're still in business. There are two reasons. First it would put them out of a job if they succeeded in relieving poverty. There's self interest at work here. Second, ending poverty would require change in the world order that would definitely upset their donors. And that would never do.
There is a way to solve poverty. It is to redistribute wealth to democratically elected governments in poor countries that could be held accoutable for its use because tax could not be siphoned off by corrupt officials and major corporations into tax havens run by lawyers, accountants and bankers.
Some of the world's aid agencies have been able to embrace this idea of tax justice - and realise what they look at as a result is a post - aid world. Others remain wedded to the aid view of Geldof and Bono - where dependency prevails. Those who want to keep tax releif for rich donors have to be in that camp. It's a world view that does not ask why some are poor; it's a world view that doff's its hat to the wealthy donor without asking why they're rich and at whose expense. It's a perspective on aid that perpetuates non-emergency aid - and that, by implication, requires the perpetuation of poverty. And what is the benefit in that?
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Whilst I don’t doubt the adage that power is an aphrodisiac, I think you meant to say that the poor countries have “democratically elected” governments.
Whoops.
Problem of blogging from an iPad! Although, let’s be honest – I’m aware proof reading is not my strongest skill
So thanks. Corrected now
I am puzzled by the reaction to the cap. It is one of the few things Osborne has done which is not utterly indefensible.
I see no reason why the rich should be free to hypothecate the tax they pay unless that is also open to the rest of us. And I don’t think hypothecation is a good idea
Precisely
But that is exactly what these donors want
It’s actually quite a sensible policy and one held in common with places like the USA where charitable giving is much more significant than it is in the UK.
Charitable donation can be a source of tax avoidance/evasion. Avoiders/evaders transfer entitlement to income and capital to off-shore family trusts masquerading as “charities” and siphon the benefits of the money back to themselves using arrange of scams.
What is so revealing about the big charities whinging is that it makes them look like they are owned by their large donors.
Precisely
I think you’re spinning this unfairly. The £50k limit is an absolute one – the maximum any individual will be allowed to claim.
For a ‘normal’ individual, the limit will be lower, as the restriction kicks in at 25% of income. If someone wishes to give more than a quarter of their income to charity, they will no longer be allowed tax relief for doing so. In fact, as the claim by charities is protected, they would be hit by a tax demand in such a case.
I can understand your argument; should rich individuals be allowed to subvert democracy by allocating their public benefit contributions to projects they support rather than via elected governments? The reality is that in a lot of ‘poor’ countries there may not actually BE a democratic government, and in our own countries our governments have a habit of spending money poorly.
I happen to think it quite reasonable to think that no one should be able to claim tax relief on more than a quarter of their income
Give me a reason why it isn’t?
And if there is tax justice there is much more likely to be a democratic government – as research at the Institute of Development Studies by Mick Moore et al has shown
You might like to explain what sort of person with an income of less than £200K a year is able to donate 25% of their income to charity. In reality, I suspect we are talking about tax avoiders channelling personal income and gains into family trusts disguised as charities.
Dave
Please don’t let reality spoil Chris’ pedantry. That might shatter the myth
Libertarians live in an abstraction from reality
Richard
Just re-read the blog. It’s sad that you’re so cynical about the anti-poverty work done by these organisations. By that rationale, if tax avoidance ended, you wouldn’t need to write this blog any more, so you don’t want tax avoidance to stop!
Nothing could please me more than retiring when tax avoidance is over
There will be something else to make me angry – don’t worry
I’d say that in most cases individuals giving donations on that scale are not merely looking to salve their consciences. They want influence, and maybe a position on the board. Rather like with the high-roller donors to the Conservative part, the donation is an investment, and “it will be awesome for your business”.
Agreed
And I see it time and again
It is why some major UK charities won’t do tax justice
They don’t take long to identify
Others remain wedded to the aid view of Geldof and Bono — where dependency prevails.
That statement is fundamentally untrue.
DATA, of which Bono was a founder, “was created for the purposes of obtaining equality and justice for Africa through debt relief; adjusting trade rules which burden Africa; eliminating the African AIDS epidemic; strengthening democracy; furthering accountability by the wealthiest nations and African leaders; and transparency towards the people.” That does not equate to “keeping the aid business going”.
That the organisation does not yet understand the contribution that tax reform could make to this is very unfortunate: but it’s not an excuse to condemn the whole direction.
Bono dominates his charities
He argues in favour of tax havens and saus they’e about ‘tax efficiency’
He maintains the status quo
So will his charities until they stand up to him
So ONE argues for country by country in limited form for the extractive industries but not generally. There’s only one reason for that
Sorry – but while he uses his power to keep current power in place for his own self interest I sure as heck will argue with him, anytime, anywhere
Err, how many poor countries have democratically elected governments?
You don’t have to tell me about charitable institutions having self serving managers, I think that pretty common. But despite the imperfections the world is a better off with them.
Tax Justice will help, I grant you that, but please do not delude others that it will abolish poverty. And anway, Poverty is not just a function of material wealth.
With tax justice how many kore democracies will there be?
And given the goal of tax justice is income redistribution – something even the OECD argues for now – how much more effective we’ll be at beating poverty
And sure as heck povertyu is not just about material goods – but a great deal of it is when you don’t have food, water, access to healthcare and education.
So don’t argue otherwise, please
How much food, water, healthcare and education? What is your standard?
Do we level up or down ? What if the resources are not available at the right place and time? Do some or all go without? What do we do with people who don’t want to play ball?
Which elite decides all this? And OK we can start with Income for starters, but what about Capital ?
We know, disasters apart, resources can be available in the right place at the right time.
Let’s startr with no one goes to bed hungry at night, everyone has running water and everyone sewage, plus education to 16 and free healthcare
All possible
your problem with that is?
Luke 15:3-7 ?
http://www.bbc.co.uk/news/uk-politics-17661011
But is he Jesus, or the sheep ?
Just 1 quick comment. When I studied for a Masters in Development Studies at UEA which I completed in 2008 , many African students were angry that their countries are constantly portrayed in the media as welfare dependant on aid from developed countries. We need to assist them to have fully functioning states able to raise their own tax for expenditure purposes. Surely tax justice will contribute to this in a meaningful way. Some critics argue that Bono and Geldorf’s views belong in the past. Perhaps they both need help to move forward for the sake of all Africans.
Agreed