Tories study plans for 20pc VAT

ad9898_3

It maybe unpopular, but what can they do ?, at least they are trying to figure out ways to reverse the huge damage that Labour have bestowed on the Britain's society and economy over the past 12 years with their 'borrowing to invest' mantra (read-just borrowing).

It shows how big our debt is when this particular measure that is being considered (to raise £10 billion) will only be a fraction of what is required. Obviously in this time of wage cuts and freezes, raising taxes will have no effect on the continuous rise in property prices, oh hang on........:D

http://www.telegraph.co.uk/news/newstopics/politics/5996163/Tories-study-plans-for-20-VAT.html

Davesnave

Would it be that unpopular? I can't remember feeling terribly excited when the rate was cut by 2.5%.......in fact I recently calculated a few ex-VAT purchases I made on t'Internet at 17.5% and spent the next 10 minutes wondering why their figure & mine didn't tally!

Mind you, maybe 'how soon they forget' is only applicable to drops, or old fogeys like me!

prowla

When the rate was cut, it was obvious that it was going to go back up and higher after the next election regardless of who wins.
The cut was a meaningless short-term measure, but the eventual higher rate will stay.

StevieJ

ad9898 wrote: »

It maybe unpopular, but what can they do ?,

Put direct taxes up

Rochdale_Pioneers

I'm in favour of it. A tax on consumption is exactly what we need. And anyway, it puts us in line with the rest of the EU and their VAT rates.

LizzieS_2

Raising VAT is a tax on all - makes it fairer than forcing just taxpayers to foot the bill everytime, and certain essentials foodwise are VAT free.

HAMISH_MCTAVISH

LizzieS wrote: »

Raising VAT is a tax on all - makes it fairer than forcing just taxpayers to foot the bill everytime, and certain essentials foodwise are VAT free.

Sky news have just stated the tories have issued a denial that this is being considered. But they would probably say that either way.

Graham_Devon

StevieJ wrote: »

Put direct taxes up

This is direct tax. And what's more, everyone pays it.

It's one of the fairest taxe's around. Doesnt mean I personally enjoy paying it. But at least those around me on benefits are also paying if it they want to buy something the same as me.

Direct taxes such as income tax would just be draining yet more tax from select people.

Numenor

LizzieS wrote: »

Raising VAT is a tax on all ...

Not quite, because the wealthy will often have 'businesses' to make large purchases with and claim the VAT back. And accountants to help them make the biggest savings.

HAMISH_MCTAVISH

LizzieS wrote: »

Raising VAT is a tax on all - makes it fairer than forcing just taxpayers to foot the bill everytime, and certain essentials foodwise are VAT free.

True.

But raising VAT is also a disproportionately higher tax on the poor, as the poor spend a greater percentage of their income every month than the rich.

It also inhibits consumption, leading to less consumer spending, and therefore causing substantial damage to the real economy and real jobs.

I'd personally like to see greater taxes on savings. The banks are just hoarding the cash anyway, so it's not being actively re-invested in the economy to the extent it should. Negative interest rates may also be worth looking at.

vivatifosi

I had two thoughts when I heard this.

The first is what will it do to inflation? Will it push inflation up, or will there be pressure on retailers and producers alike, whose margins are already lower, to absorb any increases.

The second is this, will it lead to some almighty spend fest that in the weeks prior to its introduction?