Reduce VAT from 20% ?

[Gimlet]

 

If you put regulation/implementation costs into the mix, then you need to put the benefit costs into the mix too - like how much inward investment the UK has had because we are in the EU. Don't get me wrong, i'm no big fan of the EU as it currently stands, but the EU isn't a scapegoat for our spending.

 

I'm not using it as a scapegoat. You asked where we could cut spending. I offered it as one example. Also the costs I gave were net: they take supposed benefits into account.

But I don't want to be responsible for dragging a thread about tax into a debate on Europe.

The problem with spending is that vested interests turn every government department into sacred cows. We are told we cannot live without them and savings must come from somewhere else. We have run out of somewhere else.

[pegasus bridge]

Better to tackle taxation at source: reduce government spending so no-one has to pay so much.

^this gets my vote .

[mark@mbb]

They know the working man will keep paying it and if we cause any problems they send the odd lot in we should all stick together and vote ukip a new party has got to be good for us we are getting shafted by banks insurance companies and the taxman

 

Rant over

[scolopax]

Something needs to be done about the hideous amount we spend on pensions.

[aris]

Something needs to be done about the hideous amount we spend on pensions.

 

Certainly public sector pensions need to come into line with private sector.

[kent]

There is a real economic argument that a reduction in vat could raise revenue raised via affordability and also the lack of incentive for persons to 1. avoid registering 2. encourage a true end to "cash work".3. stimulate the economy via affordability.

will it be reduced? NO, not when we remain in Europe it wont! VAT was once zero rated on many things now those things are far fewer, is it fair that a person who needs a new back door gives 20% clear to the gov. for the privilege or the guy who buys insulation for his own home from the builders merchants?

VAT was never meant to be fair its meant to be a hidden tax

[aris]

There is a real economic argument that a reduction in vat could raise revenue raised via affordability and also the lack of incentive for persons to 1. avoid registering 2. encourage a true end to "cash work".3. stimulate the economy via affordability.

will it be reduced? NO, not when we remain in Europe it wont! VAT was once zero rated on many things now those things are far fewer, is it fair that a person who needs a new back door gives 20% clear to the gov. for the privilege or the guy who buys insulation for his own home from the builders merchants?

VAT was never meant to be fair its meant to be a hidden tax

 

You could argue that taxation in general is not 'fair'. It isn't hidden either - just look at your invoice/receipt. It is all there.

[TDRsniper]

It will be interesting whether they bring down VAT when they increase interest rates......interesting although probably without surprise.

I am very aware of the difficulties that some face in regard to employment but there are large numbers of feckless morons not willing to work at all and IMO no job no vote.....that removes the ability for welfare change to influence votes.

[overandunder2012]

20% vat is bending over and taking 1 for the team

[Gimlet]

There is a real economic argument that a reduction in vat could raise revenue raised via affordability and also the lack of incentive for persons to 1. avoid registering 2. encourage a true end to "cash work".3. stimulate the economy via affordability.

will it be reduced? NO, not when we remain in Europe it wont! VAT was once zero rated on many things now those things are far fewer, is it fair that a person who needs a new back door gives 20% clear to the gov. for the privilege or the guy who buys insulation for his own home from the builders merchants?

VAT was never meant to be fair its meant to be a hidden tax

 

That argument is valid for taxation in general. Reducing rates overall increases the amount of revenue collected by stimulating economic activity thereby increasing the tax pool and diminishing the incentives for avoidance. When large organisations utilise offshore loop holes to avoid paying tax it indicates not that they are evil grasping capitalists who are stealng food from the mouths of the poor but that the taxation levels in the UK are internationally uncompetitive and are driving that economic sustenance away. To make a change to a low spend/low tax economy requires a leap of faith and the political will to confront the truth that we are spending and taxing too much. That is not that will in this country. Such thinking would cost political jobs and would not fit the electoral cycle. So taxation and spending keep chasing each other ever higher and fiscal drag exerts a disproportionate burden on those who can least afford it.

You're right about the EU though. If we abolished VAT and slashed corporation tax to 10% there would be tears before bedtime in Brussels.

[islandgun]

agreed, less tax equals more investment, from within and outside Britain which equals more jobs and exports

[harry flashman]

One of the 'Canons of taxation' developed by Adam Smith said that a tax should be linked to 'ability to pay'. VAT does not tie in with this because the amount of VAT on a particular good will be the same for everyone, however much they earn. This means that VAT is regressive. In other words, the more people earn the less the proportion of their income they pay in tax. Regressive taxes will hit less-well-off people harder than the better-off.

 

actually it's not regressive for the less well off, you don't pay VAT on food, and given the poor spend more on food as a proportion of total spend than other groups, it works out better for them

[lexikia]

Personally I'd rather see VAT go up in lieu of other taxes. VAT is an equitable tax that EVERYONE pays and very difficult to avoid. That includes non-dom's, the unemployed, tourists, etc. Basically a tax on consumption instead of earnings.

I think tourist's can claim it back

[aris]

I think tourist's can claim it back

Not eu tourists.

[felly100]

actually it's not regressive for the less well off, you don't pay VAT on food, and given the poor spend more on food as a proportion of total spend than other groups, it works out better for them

Loads of food stuffs are standard rate VAT.

[aris]

Loads of food stuffs are standard rate VAT.

Only if you don't know how to cook. :-)

[Nial]

Not eu tourists.

 

They could if we weren't in the EU!

 

Nial

[aris]

They could if we weren't in the EU!

 

Only for goods - not services (hotels, restaurants, etc). In essence, a foreigner buying something here and taking it outside of the EU is exporting it.

[Nial]

Only for goods - not services (hotels, restaurants, etc).

 

Aye, but nobody can do that. This is where pushing the VAT rate up starts being counter productive, and as others have said

if you encourage people _not_ to spend their money too much the economy will grind to a halt.

 

Nial.

[aris]

Aye, but nobody can do that. This is where pushing the VAT rate up starts being counter productive, and as others have said

if you encourage people _not_ to spend their money too much the economy will grind to a halt.

 

Nial.

There is a tipping point - I agree, but what if vat went to 25% (not unheard of in the EU) - but income tax went down 5% too? An interesting proposition.