How to stop state thievery

As published in the Suffolk Free Press and www.suffolkfreepress.co.uk, Thursday, March 7, 2019

At the very heart of Libertarianism lies a belief that individuals act better – for themselves and others – the fewer obligations that are placed on them by the state.

Charitable giving is a case in point. When taxpayers are forced to transfer significant amounts of their income without their consent, they naturally resent it.

The human level relationship between the donor and the recipients is broken. In the worst cases, such transactions can actually destroy the relationship between benefactor and beneficiary.  

We are, rightly, urged not to develop a hard heart toward the impoverished; when we give out of choice we do so out of grace for our neighbour.  When we are coerced to assist, we can come detest the recipients because we have been, in effect, victimised by state thievery.  

State welfare payments are a case in point. Taxpayers see their hard-earned income being given to those whose needs and situations they have no knowledge of, whilst those receiving, for example, Universal Credit are rarely well-served by a bloated, unfeeling and ineffective state apparatus.

Although free food is an obvious draw, the fact that the numbers relying on food banks has risen in recent years is largely due to both the Whitehall and local maladministration of a system that has sundered the relationship between the two.

On the other hand, the fantastic support – both of time and items – given to these foodbanks, show the desire of individuals and businesses to help out those more vulnerable fellow citizens.

I believe we need to create a giving culture, one which facilitates and applauds the correct relationship between donor and recipient, ideally at as localised a level as possible.

A recent study in Forbes magazine showed that the levels of charitable giving are highest in those societies that combine both a strong faith-based sense of obligations to their fellow citizens and a low national taxation rate.

Based on giving alone, the U.S. comes first, giving 1.85% of GDP, followed by Israel at 1.34% and Canada at 1.17%. Nations with cradle-to-grave welfare systems rank far down the list: Sweden 18th, France 21st, Germany 32^nd. 

The UK lands somewhere in the middle.

The US has a much more libertarian culture than our own, which means that there is a far greater propensity for individuals, trusts and companies to make regular contributions over the longer-term.

A report called Giving USA, published by Giving USA Foundation, showed that donations from all of these sources have been steadily rising over recent years.
So how can we encourage a better culture of giving in the UK?

Firstly, we need to reassure individuals and companies that giving-in-kind, including their expertise, skills and time is at least the equal to, if not in certain circumstances greater than, financial donations per se.

Changes to the taxation system that allows businesses to offset this giving-in-kind against tax or business rates would certainly, in my opinion, encourage more long-term business support for local charities.

We also need to ensure that there are more generous and visible tax breaks for companies giving to charities.

Next, we probably need to simplify the Gift Aid system. Why not allow the Government to add the basic rate of tax back onto every recorded personal donation as the default position, rather than requiring additional paperwork for donors to allow the Government to claim it back?

Finally, we need to be less squeamish and cynical when citizens, trusts and businesses seek publicity for their charitable giving initiatives. Why wouldn’t they wish to seek acknowledgement for the support they are giving others? If nothing else, such coverage should encourage others to do exactly the same – so that everyone benefits.

Ends.