Parliamentary Sketch : Cooking the books

Westminster was thick with the smell of humbug this week.

Labour, who spent 13 years resisting the introduction of a 50p top rate of tax and only introduced it as a pre 2010 election crowd pleaser, are now placard and shroud waving following the Chancellor’s announcement that he will cut the rate by 5p because it has proven ineffective in getting high earners to adopt the “we’re all in it together” spirit of the Coalition.

Although, personally, I would keep it until something more effective is found, I won’t die in a ditch to keep it.

Meanwhile, my Cornish colleagues and I are doing our best to recreate the heavenly aroma of freshly oven baked pasties as we engage in the first Parliamentary skirmishes of the pasty-tax war. It’s going to be tough and Chancellor Osborne appears not for u-turning.

Then there’s a whiff of fudge on the matter of charity tax relief.

I happen to believe that George Osborne has perhaps stumbled on a noble policy which, it now seems, he didn’t get the chance to consult his high-net-worth party donating chums about before announcing in the Budget.

There’s been a lot of whingeing and whining about this, but few in the media have picked up on the massive personal benefit the super-rich accrue to themselves when they donate. Any basic-rate tax payer who “gift aids” their £1 donation receives nothing themselves, but knows that the charity receives a further 25p from the State. But a 40% or 50% tax rate donor can also claim a personal benefit and get their own tax bill cut.

Cornwall, although the poorest region in the country, is also one of the most generous. This is often the case. The poorest still managing to be the most generous with the little they have.

Not only do the super-rich often get the warm glow of public acclaim for their apparent generosity, but they also neatly avoid paying substantial tax. Many of the poorest donate from their taxed income.

The Chancellor is not banning wealthy folk from giving to charity, he’s just saying that they should pay their taxes…

Though I disagree with old George on many things – not least his unpalatable pasty tax – he’s right on this one. But I fear there’s a fudge pie coming round the corner.

17th April 2012

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