UK facing VAT rise?

The_White_Horse

until the public sector has been decimated and cut to the absolute bone, tax rates should not be touched.

get rid of classroom assistants for a start. when i went to school, the teacher looked after the class, with no assistant. and we can all read better than the kids of today. class room assistants is just another way of saying "how can we waste more money".

Basically, the govt should just stop borrowing for a couple of years. they can pay out for things, and when the money runs out, it runs out and the public sector and benefit brigade will have to forgo their pay. that is the only way these people will learn that there is no magic money tree.

One of the biggest problems with the public sector and benefit brigade is they genuinely have no understanding of money, or where it comes from.

Thrugelmir

vivatifosi wrote: »

The Institute for Fiscal Studies has warned that a VAT rise may be needed to cut the deficit.

Highly likely that taxation will need to rise to bridge the gap at some point.

Would appear that cutting the annual amount that can be invested into pension schemes is the current target.

Generali

Eellogofusciouhipoppokunu wrote: »

VAT is a disproportionate tax, which takes a higher percentage of income from the poor than the rich. Food prices are the same for rich and poor, so are utility bills, travel costs, etc.

That is generally the case internationally but in the UK, as there are such a huge number of 'zero rated' items, the burden tends to fall on high-ish earners: people with a decent disposable income who can afford to spend on luxury items but don't end up saving/investing most of their money.

Eellogofusciouhipoppokunu wrote: »

All this will do is stop people spending and push the economy back into recession. Time the government started looking at ways to reduce the burden of taxation, not increase it.

I agree. If you look at countries in history where austerity has been successful, the majority of the balancing of the Government's books has come from cutting spending. The tiny amount of rebalancing that the current Government is doing is almost all about increasing taxation.

zygurat789

MacMickster wrote: »

No VAT is charged on food. Lower rate (5%) VAT on gas and electricity and at 0% on bus fares, childrens clothing etc.

As I said, increase benefits and the minimum wage by 2% to assist the poor with the small amount of their spending on which they do pay VAT.

As people get wealthier, however, then more of their spending is on discretionary items on which VAT is charged at full rate. For those who avoid or evade taxes on their incomes, VAT is an excellent way of collecting tax when they actually spend their money.

This is untrue. Think of all the anomaly cases, jaffa cakes, gregs etc. Although supermarket tills don't always show it many processed foods have VAT at 20%.

silverchair

The_White_Horse wrote: »

until the public sector has been decimated and cut to the absolute bone, tax rates should not be touched.

get rid of classroom assistants for a start. when i went to school, the teacher looked after the class, with no assistant. and we can all read better than the kids of today. class room assistants is just another way of saying "how can we waste more money".

Basically, the govt should just stop borrowing for a couple of years. they can pay out for things, and when the money runs out, it runs out and the public sector and benefit brigade will have to forgo their pay. that is the only way these people will learn that there is no magic money tree.

One of the biggest problems with the public sector and benefit brigade is they genuinely have no understanding of money, or where it comes from.

I'm not sure whether you are being serious or not "The_White Horse" as your post did make me have a bit of a giggle. You do seem to be quite anti-teachers.

So you are saying that teachers and other public sector workers should work for free "forgo their pay" once the "money runs out". It sounds like you are also anti-education. Most of the money being wasted, "The_White Horse" is due to the awful PFI initiative. Schools & hospitals have lovely new buildings, however cuts are being made to services as it costs so much more to run these buildings. For example a lot of schools cannot afford textbooks , exercise books, stationary (I know students should bring their own, but...), chemicals & equipment for practicals. The Government's Academies are also a huge black money hole. When the Government keeps changing the Scheme of Work also costs schools money and is also quite stressful for the students.

Heres another example of how money has been wasted in hospitals:

http://www.bbc.co.uk/news/uk-england-london-20479702

It doesnt seem to mention in the article, but the A&E earmarked for closure had recently been refurbished at a cost of £12 million & just opened 6 months ago.

Im sure theres a huge amount of wastage like the above which does need stopping & those in management that make those decisions need to be held accountable. Unfortunately its not their jobs that seem to be cut.

Classroom assistants are there for students with a specific educational needs and are used to support them rather than the whole class. Schools with those students with statements receive money in order to support them. As soon as this money is reduced then the extra help in terms of hours with the teaching assistant is also reduced. You may not of had a teaching assistant in your class when you were a student because they may not have closed the special schools & there wasn't a huge drive towards "inclusion".

zygurat789

But all the suggestions you are making involve such small amounts that theuy are only tinkering.
When GB became chancellor there were no tax credits now they are the real problem all because our government and others in Europe were trying to redistribute wealth. If you look at the Government accounts you will see that such payments now exceed receipts for Income tax. We have given the money for our new aircraft carriers, nuclear power stations, defense forces away to anybody who can produce children.
Tax credits need to be fazed out, and quickly.

Percy1983

The_White_Horse wrote: »

until the public sector has been decimated and cut to the absolute bone, tax rates should not be touched.

get rid of classroom assistants for a start. when i went to school, the teacher looked after the class, with no assistant. and we can all read better than the kids of today. class room assistants is just another way of saying "how can we waste more money".

Basically, the govt should just stop borrowing for a couple of years. they can pay out for things, and when the money runs out, it runs out and the public sector and benefit brigade will have to forgo their pay. that is the only way these people will learn that there is no magic money tree.

One of the biggest problems with the public sector and benefit brigade is they genuinely have no understanding of money, or where it comes from.

Interesting on the teaching assistants, I do have insight into a few schools on this one and I really can say form what I can see the schools wouldn't function without TAs, the reality is they can get away with less teachers and admin staff due to them.

By all means I can't talk for all schools but an observation of 5 I work closely with in the local area.

The_White_Horse

i am saying that if the money runs out and they stop getting paid - they may suddenly realise that there is no magic money tree with never ending funds!

N1AK

Generali wrote: »

The tiny amount of rebalancing that the current Government is doing is almost all about increasing taxation.

I actually think the current lot have done a considerable amount of 'rebalancing' given the political climate:

• Council Tax Freezes
• Military spending cuts
• Benefit reforms

They cut just over £6 billion in the 2010-2011 departmental budget. The 2012 budget is the first one in god knows how long where spending is lower than the previous year (it is also lower than 2010). The deficit (in that year) is also half the size of the deficit in 2009.

Would I like the government to be more aggressive in places? Of course, but I am a realist and I know that even if they tried they would be blocked and even if they somehow got past that they'd be crucified by an electorate who don't want to face up to the need for cuts (especially any that remotely affect them personally).

N1AK

zygurat789 wrote: »

This is untrue. Think of all the anomaly cases, jaffa cakes, gregs etc. Although supermarket tills don't always show it many processed foods have VAT at 20%.

The point is that a rise in VAT doesn't make it harder for the poor to feed themselves; though it may make it a little harder for them to buy luxury items. Frankly I'm not sure a VAT rise is the best way to increase revenue but done right (with a marginal increase in benefits/pensions) it can be a comparatively fair way to do it.