Charity tax row: Donors warn of 'brake' on donations

As you know, I have been associated with charities here in the UK for some time now. With my economist hat on, with the donor hat on, with the charity management hat on, with my libertarian hat on and with my citizen taxpayer hat on, I am therefore conflicted by this proposal. Basically, the proposal here says that

From 2013, previously uncapped tax reliefs - including on charitable donations - would be capped at £50,000, or 25% of a person's income if that is higher. The government says it wants to end the practice of wealthy people minimizing their tax bill - sometimes to zero - by charity giving.

First the basic reason why tax relief is granted. All for a good reason, that the government wants to encourage philanthropy. So far so good. But given the potential of the tax abuse and the need for the bloody government to squeeze more taxes out of us, it is reducing relief. In any case, I dont like taxes anyhooo. So that is a different argument.

So here is my economist position. Suck it up. You are paying your charity donations out of your own free will. You should pay for taxes on ALL your income, irrespective of where you spend it. This idea of tax credits/relief being dependent upon where I spend my money is stupid. How about this argument which is absurdo reductio? The government wants to improve the shipbuilding capability in the UK so it decides to give tax relief on the amounts you spend to purchase your own mega boats and super tankers. How do you think that will go down? You laugh? The government already does it for companies who invest in plant and equipment and research and development and and and. This is a stupid way to drive industrial policy. Simplify life, and remove all these bloody exceptions and stuff.

My libertarian position is similar. I shouldnt be taxed at all, but if I am, then I should be taxed on my philanthropic giving just like I am taxed on all my consumption.

My charity management hat on, £50k? lol, I should be that lucky to get that much. The charities that I am involved in are tiny, less than £150k in revenue, i can only wish I had donors who donate more than £50. This wont impact me at all, if you are donating £200-3000 which is our usual individual contributions, the tax hit wont make a difference.

With my donor hat on, I dont think I will donate more than 50k any time soon, but my estate could, and I dont see a problem in paying taxes on my income. Why would I want to have tax credits? Only if I think that I am replacing government activity with my charity donations no? But I dont, i see this as a different activity so tax away.

With my citizen taxpayer hat on, can the frikking government please stop taxing me?