Sunday, April 15, 2012

Tax avoidance for the rich, PAYE for the rest of us

Two recent news stories have exposed how different are the arrangements for taxing the rich and for taxing the rest of us now are.

The call for candidates for public office to be required to publish their tax returns would not have been made if people had confidence they were paying a fair amount of tax in the first place. Clearly we do not have that confidence, so we now prefer to rely on the threat of public ridicule rather than HM Revenue and Customs.

And the row over the reduction of tax relief on charitable donations also reveals that the wealthy inhabit a different tax world from the rest of us. There is a scheme whereby people under the PAYE system can use it to make charitable donations. But if you or I announced to the authorities that we had decided to reduce what we pay in income tax and give it to charity instead, I think we would receive pretty short shrift from the authorities.

I am all for philanthropy, but there should be one tax regime for all.

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