Time To Lower VAT? Retail Sales Die Off

chewmylegoff

DecentLivingWage wrote: »

OK

http://uk.reuters.com/article/2013/01/17/uk-britain-tax-borel-idUKBRE90G0VB20130117

(A campaign to create thousands of jobs by lowering vat on eating out!) Coming soon to a town nr you.... (maybe Croydon first tho....:D)

It only creates more jobs if people go out more and spend more money. Since VAT cuts don't make people do that it won't work (especially as to pay for the vat cut you'd have to put up income tax or NI this negating the effect of the VAT cut on people's spending power).

DecentLivingWage

chewmylegoff wrote: »

It only creates more jobs if people go out more and spend more money. Since VAT cuts don't make people do that it won't work (especially as to pay for the vat cut you'd have to put up income tax or NI this negating the effect of the VAT cut on people's spending power).

'VAT cuts don't make people spend money'

Todays voters are not uneducated sheep! They will need a wider debate /analysis before accepting that unqualified line. One poll doesnt make a summer! They know that all it means is 'people who were questioned ....'

More profound analysis of the circumstances and scope of the poll will be needed - and others carried out before we can ascertain the boost value of a poss temp vat cut.

fiscalfreckles

Retail prices for consumer goods are actually really low right now.

chewmylegoff

DecentLivingWage wrote: »

'VAT cuts don't make people spend money'

Todays voters are not uneducated sheep! They will need a wider debate /analysis before accepting that unqualified line. One poll doesnt make a summer! They know that all it means is 'people who were questioned ....'

More profound analysis of the circumstances and scope of the poll will be needed - and others carried out before we can ascertain the boost value of a poss temp vat cut.

So the poll is wrong (I'll remember that next time you start going on about opinion polls showing labour leading - you can't have it both ways). Can you post some positive evidence that VAT cuts work? (Ed Balls saying VAT cuts work is not evidence that they do).

chris_m

chewmylegoff wrote: »

(Ed Balls saying VAT cuts work is not evidence that they do).

Ed Balls saying anything at all is only evidence that he hasn't got lockjaw.

ILW

I would suspect it would take a VAT cut of 50 to 100% to actually make much much difference to spending decisions.

grizzly1911

I could see it making a difference for a very small number of punters looking at big ticket items. It might just push them over the edge to do it.

For the vast majority of stuff don't believe 2.5% or 5% off is going to achieve anything and it would only need recovering somewhere else as chewie points out.

Commodity prices falling, fuel, energy, food might give a more confidence to spend but that won't happen either.

Graham_Devon

Lowering it to 15% didn't make any difference on sales figures, did it?

BertieUK

Graham_Devon wrote: »

Lowering it to 15% didn't make any difference on sales figures, did it?

..There are many families that a 2.5% reduction on their maintenence costs of replacing say a basic kitchen at £5,000 would save them £125.00 thats not to be sneezed at.;)

Thrugelmir

VAT is one of the easiet and effective ways ways of collecting tax revenues.

I'd happily pay higher rates if income tax was correspondingly reduced.