“A bone to the dog is not charity. Charity is the bone shared with the dog, when you are just as hungry as the dog.”
That Jack London quote sums up the true nature of charity beautifully for me, and yet here we are, in a frenzy of muppetry and crosspatch headlines because wealthy ‘philanthropists’ are having their bone-relief reduced, and are being called mean names while the Chancellor goes about it.
Never willingly kind to the Gidiot, it pains me to admit that he might be right about any issue, let alone about something which makes so many of my pals froth something dreadful. But there it is. I think he’s right to remove higher rate tax relief from a load of things, including the act of giving to charity. ‘Philanthropists’ (at least, those who are making their voices heard) don’t take my point of view. They are ‘enraged’ http://www.independent.co.uk/news/uk/politics/who-are-you-calling-tax-dodgers… …and the Chancellor has provoked ‘fury’.
And I say to myself….hmmm.
Mr Ross, an accountant who has given away £33m in recent years, told The Independent: “You want to encourage people to be more philanthropic, not limit them. [This decision] can only harm the country. They are using a sledgehammer to crack a nut. They are penalising everybody.”
Only they’re not.
They are ‘penalising’ only people with an income over £200k per year (because the tax relief cap bites when it exceeds £50k or 25% of a person’s income, whichever is the greater). This then is a ‘penalty’ which applies solely to the notorious top 1%.
You, Mr or Ms 1%er earn your salary (let’s leave aside for a moment whether you’re genuinely worth so much more than other mortals and assume you do actually ‘earn’ your salary), you pay tax on it (only once all your other ‘avoidance’ measures are in place, of course), and then if you want to spend it all on shoes, foreign holidays, drugs, hookers or fast cars, you can only claim your tax back if you can somehow persuade the taxman that it’s a legitimate business expense. Sheesh. The world is just so damned unfair.
By contrast if you want to give that money away to a charity, you can claim back the tax you paid to the exchequer. No other strings attached. If you want to give that extra money to a charity too, good for you, but unlike Gift Aid (the tax relief that operates at the basic tax rate that most of us pay and which takes all the rebated funds for the charity to which the original donation was made) the system doesn’t require you to do so. If you want to trouser the tax-back you can.
Mr Ross (who with £33million to give away, earns at what i imagine to be the upper end of the accountancy scale) says: “There are not enough wealthy people giving to charity and this is giving out completely the wrong message. It is saying if you give away too much we are going to penalise you.”
It is saying that once you have parted with your cash, that’s it. It doesn’t find it’s way back to you, like a fond cat after a house move. Most of us will completely understand this apparently unfathomable concept, and will also understand it as the normal course of events, not some sort of cruel and unusual punishment.That some ‘philanthropists’ don’t see it that way is probably because (as helpfully explained by Mr Ross) they have a “psychological barrier” when it comes to giving their money away. Many of us will recognise this psychological barrier in ourselves. And we should sympathise. Where I grew up, we called it “meanness”.
But to apply such an epithet to ‘philanthropists’ would in itself be meanness, wouldn’t it? As Dame Stephanie Shirley, who has been fortunate enough to have tens of millions to give to charity, said: “To look at philanthropists as if they were just tax avoiders is really rather disgusting”. And this is a fair point. This finger pointing should stop. Calling people who avoid tax through legitimate avoidance mechanisms, which they are perfectly entitled to employ for tax avoidance purposes, “avoiders” would be like calling people who claim benefits to which they are perfectly entitled “claimants”. Oh. Hang on. Maybe that’s not so mean after all! What’s the ‘psychologically barriered philanthropist’ equivalent to “scrounger”? What about the equivalent to “benefit scum”. Yeah. Thought not.
In fairness to Dame Stephanie, she is free from psychological barriers herself, saying: “If tax relief were to go, I would give the same amount, but that isn’t true of most philanthropists.” Which is a shame, because is is true of most people. £10.6 billion was donated to charity by personal donors in 2009/10, the vast majority of that unprompted by higher rate tax relief. Meanwhile very wealthy individuals gave 100 donations of £1 million or more in 2008/09 (the latest year for which information is available), with a combined value of £1.0 billion. (Source: http://uktoremet.org.uk/the-promotion-of-philanthropy/the-uk-charitable-secto… )
In total, charities received £52 billion in 2009/2010. Most of the money which goes to charities does not come from the happy, ‘philanthropic’ few.
If I can’t bring myself to feel cross on behalf of the ‘philanthropists’, I should feel cross on behalf of the charities though, right? Bearing in mind the psychological barriers that already exist for rich people thinking of giving, the sheer unpleasantness of calling avoidance avoidance, and the imposition of the draconian penalty of not getting some of your money back, there is sure to be less money going to good causes once this new measure becomes law. (Worse still, as this blog points out (http://giving-thought.tumblr.com/post/20110289856/to-cap-it-all-some-further-….T3SPGG2Q1Ak.twitter) the abolition of all uncapped tax reliefs means that tycoons will have even less cash back and therefore even lower motivation for generosity, thanks to having their charitable tax relief “allowance” cannibalised! The horror!)
And I do feel genuinely sad for some charities who discover the conditionality that applies to the ‘generosity’ of their donors.
But I cant, hand on heart, agree that it’s more important for a charity to receive a philanthropist’s beneficence than it is for that person to pay their tax in full. If you are a culture or heritage charity, no matter how many happy, geeky hours I have spent in art galleries, museums and stately homes, I can’t prioritise your interests when there are children eating their dinner from supermarket bins (or pregnant women going without food for a week at a time: http://unemploymentmovement.com/forum/chat-a-rap/2158-food-crisis-gripping-bi… ); if you are an animal charity, I can’t value your new sanctuary higher than making sure families have a roof over their heads; if you are a sport or leisure charity, you should come lower down everyone’s list than meeting the health needs of our ageing population.
If you are a charity stepping into the space that ‘austerity’ has created because of cuts to publicly funded programmes that used to help the most vulnerable, I salute you. These are difficult times, and many of the people you work with are in increasing need because the publicly funded support they used to have has dried up, due to lack of tax revenue. Yes, that’s right. We think we need more charity, because the Government is collecting less tax and therefore providing less welfare. We won’t fix that by allowing wealthier people to pay less.
My next argument is one of the hardest ones for me to make, because currently this woeful excuse for a Government is spending what little money it does have on THE WRONG THINGS. This terrific rant from @ChunkyMark picks just one of the many examples of upside-down priority setting we currently have to endure: I sympathise with anyone with a full wallet and a good heart who thinks that they would spend their money more wisely and well than this bunch of rotten, heartless hoorays.
But it isn’t right to let the ‘deserving’ and ‘undeserving’ causes be sifted by those whose only qualification is that they’ve managed to attract the highest share of the spoils. I often reference Clem Attlee’s remark that if a rich man wants to help the poor he should pay his taxes gladly. On this occasion it’s worth quoting a fuller extract from his book, The Social Worker:
“Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim. In a civilised community, although it may be composed of self-reliant individuals, there will be some persons who will be unable at some period of their lives to look after themselves, and the question of what is to happen to them may be solved in three ways – they may be neglected, they may be cared for by the organised community as of right, or they may be left to the goodwill of individuals in the community. The first way is intolerable, and as for the third: Charity is only possible without loss of dignity between equals. A right established by law, such as that to an old age pension, is less galling than an allowance made by a rich man to a poor one, dependent on his view of the recipient’s character, and terminable at his caprice.”
It would be almost too perfect to leave my thoughts of charity and philanthropy bookended by Jack London and Clem Attlee, but there’s one more thing which has to be said about the media ferment over this measure. It’s yet more coalition ‘distraction magic’.
We weren’t really fooled by GrannyTax or PastyGate, but somehow we’re letting ourselves get really sucked into this one. While we are stamping our feet, blowing our whistles, ringing our bells and banging our drums in favour of the restoration of a BENEFIT to the 1%, p 20 of the budget lists changes to Housing Benefit and Employment Support Allowance and the introduction of the household cap (defeated more than once in the Lords) which we know will devastate countless households; it references changes to Legal Aid which will restrict access to justice for the poor, particularly in relation to matters which affect their household income; p21 invokes the universal credit with the weasel words “this will help ensure the welfare system encourages people into work wherever possible” rendering “welfare” a straightforward synonym for “destitution”. p30 brings to an end universal child benefit (while claiming that it will ‘continue to be paid universally to all those who claim it and are entitled to it’; thereby also bringing to an end the generally understood meaning of the word ‘universal’). p31 removes the 50% rate of income tax from the highest earners. p40′ reinvigorates’ Right To Buy, removing further social housing stock from the system and creating fresh conditions for a future housing bubble. As inflation races ahead of targets, p46 commits the Government to a BELOW inflation increase in the minimum wage, makes it easier to sack people and harder for the wrongfully dismissed to obtain justice; it starts a race to the bottom on regional pay rates. I’ll stop there. You get the picture.
We are a nation in thrall to Osbornomics. This year’s budget is one of the most aggressive and destructive attacks on the poor and vulnerable that I can think of and yet we are shouting for the rights of the wealthy and the charities they favour.
Well, I’m not shouting for that.
‘Philanthropists’? Pay your taxes gladly. And if that leaves you feeling a little hungry, then that’s the best time to share your bone.