Can someone explain why the philanthropists are complaining?

[claig]

I don't get it. Why should the tax payer subsidy the billionaire philanthropists by making contributions to charities tax exempt? If we donate to Comic Relief, it comes out of taxed income doesn't it? I don't understand it and may have got it wrong. Can someone explain?

"If we donate to Comic Relief, it comes out of taxed income doesn't it?"

No, any tax payer can apply Gift Aid to any donation to a registered charity. This is immensely valuable to the charities and you will find it recommended (quite forcefully) by many.

This is simply about how the tax relief rate is applied in the higher tax bands. As the donor will be giving away much more money than they are saving on their tax bill, the only "loser" here (in terms of who ends up with less money) is the charitable recipient.

I think doom sayers always have an agenda, just like the scare mongers in the year 1000 did when they frightened good people into believing that the end of the world was nigh. Every age has a new scare. Now its tidal waves, biblical deluges and catastrophic climate change to flood the land on Sunday, followed by global warming desertification of your cabbage patch on Monday.

It's not the capitalist behind it, because what is a capitalist? Is the person who owns a launderette a capitalist?, is the small business owner who employs staff a capitalist? Is the factory owner who manufactures cars a capitalist?

Behind it is the elite ventriloquist and the doom sayers are their dummies, scaring good people yet again in order to reshape society to suit the elite and limit the growth of the people in accordance with the elite sustainability drumbeat.

'As the donor will be giving away much more money than they are saving on their tax bill, the only "loser" here (in terms of who ends up with less money) is the charitable recipient.'

But isn't the government and its people effectively "losing" some potential tax revenue?

There are many charities. It seems that Liam Fox had a charity. Does that mean that donations to all these charities could be tax exempt if donated by higher rate tax payers?

www.telegraph.co.uk/news/politics/conservative/8885995/Liam-Foxs-adviser-Adam-Werritty-facing-questions-over-missing-60000..html

claig if you take your arguments seriously, you should argue that there should not be need for any charity activity at all as the government is capable to allocate the resources to what "its people" need. in fact there are numerous countries around the world where charitable donations are so restricted, there is no charitable sector to speak of. unsurprisingly, most vulnerable in these countries are in terrible predicament.

I agree with WelshCerys, the Tory MP on the newsnight clip did seem to make sense.

bemybebe, I do believe that the State has a duty and responsibility to look after its people and prevent any of them from being in a "terrible predicament" because the State is funded by all of the people's money.

Government ministers are accountable to the public and we choose to vote them in and out. When I read of some charity bosses earning more than the Prime Minister, and when I hear that some philanthropists pay no tax and when I read about some charities, I do wonder how accountable they are to the public and if some of the tax exemptions given to them and some of the tax relief given to philanthropists might in fact be better given to the government, which is why what Osborne and the Tory minister on Newsnight say, as far as I understand it, seems to make sense.

'claig if you take your arguments seriously, you should argue that there should not be need for any charity activity at all'

I am please that charities exist and do great work, but when I see Oxford and Cambridge University saying that dobations to them will be cut and when I see well-heeled philanthropists on our news shows telling us that they may have to cut back their donations unless they continue to receive tax relief, I tend to have more sympathy with Osborne and the government.

'For almost 30 years they provided comforting cups of tea and a sympathetic ear for patients at their local hospital.

But four veteran Women?s Royal Voluntary Service members have left the charity in disgust after learning the organisation?s chief executive earns more than the Prime Minister.'

I can fully understand how these women felt. They are certainly philanthropists, but they probably get no tax relief.

www.dailymail.co.uk/news/article-2064107/Four-WRVS-volunteers-resign-discover-boss-earns-Prime-Minister.html

'Elfed Roberts, 64, a retired assistant chief constable and former chairman of the hospital, said volunteers were ?astonished? by the salaries and felt the charity had become ?a gravy train? for full-time staff.'

"They are certainly philanthropists, but they probably get no tax relief."

Anybody can claim tax relief, although most people I know choose Gift Aid, rather than return tax through various means available to them. www.hmrc.gov.uk/individuals/giving/basics.htm

Claig please educate yourself to a basic level of understanding how charitable donations can be done in this country.

http://www.hmrc.gov.uk/individuals/giving/basics.htm

'"They are certainly philanthropists, but they probably get no tax relief."

I am talking about some of these old age pensioners who donate time and work voluntarily for free and probably don't have much money to claim tax relief on after struggling to pay their spiralling heat and water bills out of their pension money. They are philanthropists and they probably seek nothing for their work.

It is an honour to be called a philanthropist, it is probably the highest accolade possible, but I feel that the term is cheapened when I hear that some may not continue contributing to elite universities if they don't continue to receive tax relief.

people will have less money to give. it is simple arithmetic, nothing more

"don't have much money to claim tax relief on after struggling to pay their spiralling heat and water bills out of their pension money."

they probably don't pay tax at all in this case, if they do, they can claim tax relief or add to the donation through Gift Aid

Yes that is true

'people will have less money to give. it is simple arithmetic, nothing more'

But isn't Osborne trying to change things so that some of what they choose to give, goes to the government as tax receipts?

"But isn't Osborne trying to change things so that some of what they choose to give, goes to the government as tax receipts?"

Correct, so the charities get less or givers should upp their donations. Is this what Osborne and Cameron want and how does this tally with the big society message?

It is important to understand that the tax relief can be applied for registered charities only, if we would like to limit the fraud or abuse of the system by essentially non-charitable sector, then we should look at what is a charity and tighten the definitions accordingly, not take away the tax relief.

"if we would like to limit the fraud or abuse"
sorry, fraud obviously should be dealt with via appropriate law-enforcement channels...

Charity sometimes has created a gravy train and rewarded those in senior positions too much but they also provide lower waged work for their employees.

Do wealthy philanthropists benefit in other ways other than avoiding tax, yes I think they do.

I think you need to examine the competing philosophies of individualism and collectivism and decide how this sits within democracy.

So if Mr.R.Banker gives £1m and doesn't pay tax he decides how his social contribution is spent, which may include remunerating top charity boss but also help to relieve poverty in the Sudan. He has the democratic power of individual choice to decide what social ills he relieves. He and his charity are not democratically accountable.

But if Mrs.livesonasandwhich pays all taxes due, she acts within a democratic system where politicians decide which social ills should be relieved. This is a collectivist model where those that decide where the revenues are spent are democratically accountable not just to MrsL but also to all of us collectively.

Of course the best way to relieve social ills is to create both a collectivist and fair society, the libertarian will always resort to individualism even if personal choice and freedom results in inequality. Why? because he knows he has something to gain.

Goerge Osborne wants a shrinking state, he isn't a collectivist but he has a huge black hole to fill, one I might add that was caused through tax avoidance of the richest, off shoring of assets and company profits, globalisation and the fact that the banks themselves advice their clients and also take part in these avoidance schemes. GS gives a great deal of pre-profit cash to charity, strangely mitigating against some of their other global abuses such as contributing to poverty in the third world.

My conclusion is it's part of the silent take over where all money, charity incl will be out of the hands of governments. Without the ability to control the cash flow, George et al will have the very smallest but also least democratically accountable government possible which will mean that the strings will be visible for all to see.

Interesting analysis. I think I prefer the collectivist model because it is democratically accountable.

www.dailymail.co.uk/news/article-2129516/Cate-Blanchett-warns-tax-relief-cap-donations-charities-slashed-wealthy.html

Interesting to read the comments of Daily Mail readers. It seems that they are mostly supportive of the government rather than the philanthropists. Will Osborne's popularity rocket? Is this goverment of the people, by the people for the people?

If these Fat Cats are only giving to charity to avoid tax then just what does it say about these so called philanthropists? Ordinary workers give to charity without getting tax relief so why should these millionaires get away with it
From claigs mail link.

To go back to the pensioners who volunteer their time, no they don't get tax relief and many don't pay tax because they have such a low income but that disregards the fact that they spent their working lives paying tax.

Under Workfare charities are both making money through government contracts and getting unpaid labour. They are taking money from the rich and from the rest of us, they are unaccountable except I suspect to very wealthy donars and they reward their CEO with remuneration on a similar scale to the private sector.

I'm concerned that Osborns tax plan has come about at the same time as the social investment fund. Seems that at a time when charities were looking forward to mopping up a lot of tax payer cash they are now in fact going to have to prove their ability to "profit" and go to private investors. hmmm.........

'Donations to charities slashed as wealthy shun them in protest over controversial tax grab'

Doth the 'philanthropist' protest too much? Doth the public lose trust? Doth the public want the wealthy to do as us? Doth Osborne earn the moniker of 'public champion' by taxing the philanthropist's donation?

Will the public have more sympathy with a teacher's strike or a philanthropist's strike? I think the teachers will have sympathy but the philanthropist will evoke little pity unless they top up the public kitty.