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One of these things is not like the others

Public kept in the dark over ‘rogue’ charities, reports the Times. The story is behind a paywall, but I shall quote the first and most interesting paragraphs:

The names of more than a dozen charities suspected of serious abuse are being kept secret by the charity watchdog.
The identities of 13 charities placed under statutory inquiry during the past nine months have been withheld by the Charity Commission, preventing prospective donors from knowing about the allegations against them.

The inquiries are opened into charities suspected of only the most serious wrongdoing, including the financing of terrorism, tax avoidance, abuse of vulnerable people or other serious breaches of trust.

Emphasis added, with accompanying oaths. Has it come to this? That for a charity to arrange its affairs in a legal manner such that as much as possible of the donations it receives go to the cause the charity exists to help rather than to the government is to be classed with financing suicide bombings and stealing from the senile? Would it not be a breach of the donors’ trust to do anything other than practise tax avoidance?

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12 comments to One of these things is not like the others

  • Johnathan Pearce

    Tax avoidance is now increasingly being put in the same bracket as tax evasion. In other words, ordering your affairs in order to reduce your tax liability is seen as a crime.

    As Robert A Heinlein might have put it, these are the “crazy years”

  • Barry Sheridan

    Natalie, the instinctive reaction of so many to give has a proud history, it is a sentiment that honours what is best about us. Inevitably however it is also a tendency that presents an opportunity, a hi-jacking of generosity for other, more ugly purpose and illicit personal gain. The worst elements of this attitude have long been evident in the huge international aid programmes where vast sums have been allocated to deal with difficult issues that remain intractable simply because the funds have been siphoned off into private bank accounts long before it can remedy. That this corruption is evident in the more mundane cause is no surprise, my own response has become dominated by cautious giving, though I find it difficult to tell some soul going round collecting that I will not help, it is rarely their failing that has led to me becoming seemingly mean. I reflect on the ebb tide of my life and wonder is there nothing that cannot be corrupted, the sad conclusion is no.

  • Paul Marks

    The Welfare States have reached the point of growth where they are strangling their host (civil society) – and a parasite (the vast bureaucracy and so on) can not survive if it kills its host. In irrational desperation the state is striking out against everything and everyone (other than itself – that will come at the end).

    So legal “tax AVOIDENCE” is now considered as bad as terrorism and child rape. A state that thinks like this is in the death throes – where insanity has claimed them.

    And it is not just the state – it is the educated elite in general, remember this was printed in a private newspaper (owned by boo-hiss News International) the power of the education system is deep and strong – even in people who tried to oppose the collectivist ideology of the education system.

    To the forces of evil all income and wealth rightfully belong to the collective and should be “fairly distributed” – this is the doctrine of “Social Justice”.

    Even people who think they are opposing the collectivists sometimes ended up influenced by this “metacontext” (as Perry would call it) – and thus serving the very forces of evil they think they are opposing.

    We may soon come to an American style situation where people are told “you have obeyed all the laws – but you must pay us vast sums of extra money anyway”.

    And the media will say “CORRUPT – the rich are getting off to lightly!”.

    Many States in America might not be as bad as this – but the Federal government is.

    And, sorry, but all 50 States are under the arbitrary tyranny of Federal agencies – and the terrible Federal “justice system”.

    James Madison (the “Father of the Constitution”) hoped the Federal government would protect people (and private organisations) against the anti private property State governments – but he also understood that the Federal government (if the principles of the Constitution were abandoned) could become a worse threat to civil society than any State government.

    And so it has proved.

    The United Kingdom is very much going the same way.

  • WWTWM

    I am vastly more likely to give money to a charity that uses tax avoidance to minimise how much of my donation simply goes to the government.

  • Could this have been sloppy writing and editing based on poor understanding, and what is meant in practice is actually ‘tax evasion’?

  • mike

    I was just going to suggest what Alisa already raised in her question. “Sloppy writing and editing based on poor understanding” – i.e. illiteracy. Of course everyone is fallible and it might just have been a typo, but I already tend to use the distinction between proper journalists (e.g. Michael Totten) and newspaper staffers.

  • Andrew Duffin

    Oh those kinds of rogue charities.

    Whereas so-called charities which take the State’s money and then use it to lobby the same State to push what is in fact the State’s own agenda to start with – those charities are just fine and dandy, nothing to see here, move along.

  • Laird

    In the US, public charities are already tax exempt (unless they engage in some form of “unrelated business activity”, which is generally isolated in a taxable subsidiary), so they’re not paying taxes anyway. I suspect the same is true in the UK. So the mention in this article of “tax avoidance” (even if what was actually meant was its evil cousin, “tax evasion”) probably refers to the tax situation of its donors, not the charity itself. In that case what is being investigated is whether the charity is in some way assisting its donors to avoid (or evade) their taxes. The obvious example would be the donation of appreciated property, which (in the US, anyway) permits the donor a tax deduction for the full current value of the property, even though his basis in it is substantially less. If inflated values are used, that slips over from avoidance to evasion, and I can see how a government would take exception to it. (Not that I support that; in fact, I applaud any action, “legal” or otherwise, which permits people to keep their own money and thus deprives governments of tax theft.)

    The more interesting thing in the article (and probably its main point) is that the government has not released the names of these charities after nine months of investigation, thus permitting them to continue soliciting and receiving contributions from the public. One would think that if a government suspected a public charity of, say, financing terrorism, it would have an interest in moving with more alacrity to cut off its flow of funds. Nine months seems a very long time for such an investigation.

  • Mr Ed

    There might be a genuine element of confusion between tax evasion and avoidance on the part of the writer, but that would be due to either limited intelligence, haing been deceived, or deceitful intent. Many confuse words such as ‘affect’ and “effect”.

    It is hard to see how charities would commit tax evasion or avoidance given their already relatively lenient tax concessions, but the ingenuity of those seeking money is boundless.

    As for the conflation of the ‘social evils’ of tax avoidance with turning oneself into flying mince, there is a distinction in the State’s eyes between the Enemies of the People and the Socially Friendly Elements which any good Marxist would appreciate, and whilst I can imagine some of the more vile British politicians seeking to ‘reach out’ to the Suicide Bombing ‘Community’ for dialogue to understand their concerns, I simply cannot imagine the same reaching out being afforded to tax avoiders.

  • John K

    It can be argued that charities are essentially a vehicle for tax avoidance in the pursuit of good causes. I suspect the writer means tax evasion, which is sloppily being equated with tax avoidance these days. What might happen is that a wealthy individual sets up a charity to which he contributes heavily, and the charity benefits up to 45% on the tax he would have paid. If the charity then aids poor people in, say, Pakistan, by buying an agreeable villa for the use of the donor when he makes fact finding trips to his home village, then you have a rather cynical bit of tax evasion, which is also rather costly and difficult to investigate. The again, I could be quite wrong, no doubt the government is keeping us in the dark for our own good.

  • Lee Moore

    I suspect Laird is right. The powers that be suspect charities of helping other people to avoid taxes, not of avoiding tax on their own income, which is exempt. I suspect a good tax lawyer or accountant could, on receipt of a suitable fee, reel off fifty ways you could use a charity to cut your tax bill, entirely legally, especially if you’re a company.

    Those of us who think tax avoidance is no bad thing, however, do need to recognise that no government can agree with us. A good classical liberal government might accept that a taxpayer has every right to avoid taxes legally, if he can. But it would still be trying to stop up the loopholes. Whatever level of overall tax you favour, to finance necessary government activities, if you run the government you would prefer your scheme of taxation not to have a lot of unintended holes in it. If the government wishes to exempt charities from tax then I see no reason why it wouldn’t reasonably wish to exempt from its exemption charities which help other people avoid tax.

    For myself, I wouldn’t be exempting charities from tax anyway – that’s still the government picking favourites – but I recognise that’s a minority view.

  • Richard Thomas

    The holes are usually intentional but they were put there for the use of chums of the government, not for the general population.