I know they want to get rid of debt but not overnight?!

There goes the retail recovery!

Well done for voting Conservatives-bike bits will go up in price again…

Buy now and save a bit?

It was telegraphed well before the election.

Political rhetoric over the years and interventions from the Murdoch press have made income tax rises almost impossible – so consumption taxes are the only possible way to raise money – and more likely from the tories anyway as they affect the rich less than the poor.

Regressive and unfair – but it will happen.

I think the question is when not if, from 22 June, 1 Jan or next tax year. i guess a separate question is whether retailers will bear the increase in their margins.

I know they want to get rid of debt but not overnight?!
There goes the retail recovery!
Well done for voting Conservatives

🙄

Dear Chief Secretary. I’m afraid there is no money. Kind regards — and good luck! Liam.

http://www.guardian.co.uk/politics/2010/may/17/liam-byrne-note-successor

Irrespective of your political persuasion it would be very difficult to argue that VAT was regressive, as it allows people to avid the tax by limiting spending, whereas income tax/NI gives Zero choice to avoid any tax. As for it having less effect on the rich, it has the same effect on everyone it's just that some people have more money than others…a fact that people don't like but is inevitable…….

Vat at 20% won't get rid of debt overnight , it would only raise about 11 billion per year , maybe we should've kept Labour then they could've carried on borrowing money and increasing the debt!

I very much doubt that retailers will absorb the cost of the increase like they absorbed the savings when it was 15%

I think the regressive argument will be countered by increasing the personal allowances though – that and CGT increases

Raising VAT is not the solution there is not much things VAT will not effect, its easy pickings they need to change osbourne with cable he has not got a clue. Someone please tell me what country has raised VAT recently in this downturn.

its been expected for a while at least its only 20% for the moment!

do you think the cycle to work scheme will be axed too?

employees NI contributions to rise too

not employers though, which quite frankly i think is unfair, job tax my arse!

Someone please tell me what country has raised VAT recently in this downturn.

Erm the UK did… from 15% back to 17.5% 😉

consumption taxes are the only possible way to raise money – and more likely from the tories anyway as they affect the rich less than the poor

It's a well known fact that the rich buy less than the poor and pay less for services such as telecoms etc. than the poor.

Tax rises were going to happen whoever got in power….

It's just that some were up front about it than others….

( but only a little )

as it allows people to avoid the tax by limiting spending

Indeed. Poor people just shouldn't bother spending their money – if they can't afford the increase in VAT.

And with all that money they've saved by not spending it, they will soon become rich.

It all makes perfect sense, in fact, it sounds like basic Reaganomics to me.

As does the suggestion that "limiting spending" is a really good idea for an economy just coming out of recession.

I've always been a fan of VAT over income tax; easy to administer and hard to avoid paying. Combine that with a nice big personal allowance before income tax kicks in as seems likely things look sensible to me. Though it's all us middle income people who'll end up paying the most I'm sure.

Irrespective of your political persuasion it would be very difficult to argue that VAT was regressive, ……some people have more money than others…a fact that people don't like but is inevitable

[quote]

Will poor people pay a greater percentage of their earnings on VAT than rich people? I accept it is not designed as regressive but it will actually be regressive. Rich people save and invest and there is no VAT on that poor people have no savings or investments as an example.
It is not inevitable that some people have more than others we choose to have an inequitous society. If we choose this when times are hard is it not fair that those with the broadest shoulders should bear the greatest burden ?

No surprise tbh.

Dunno about cycle to work – "green economy" and all that jazz.

Irrespective of the election result a rise in VAT is all but inevitable – and all three parties have hinted at it for some time – the real question is will it be an across the board rise or will it be variable and more sophisticated e.g. no Vat on food – but 20% on Helicopters (currently 0%) and say 15% on cycles and accessories (lives in hope)

There's other rumours too

http://www.bbc.co.uk/blogs/nickrobinson/2010/05/read_his_lips.html

it is regressive as the poorer folk spend a higher % of their income on things that attract vat. Also they have less discretionary spending – so cutting back affects them more

Thing is, the regressiveness of VAT is largely cancelled out by the exceptions:

Food
Children's clothes
Books
Etc.

Essential goods and many activities are VAT exempt, its (mainly) luxuries that are VATable – certainly compared with the alternative forms of indirect taxation its the lesser of a great many evils!

😯

the regressiveness of VAT is largely cancelled out

yes so it regressive then thanks for agreeing

VAT is an evil, indirect, tax. Its separation from income makes it a blight on the poor and an inconvenience for the rich.

Exemptions? It'll be interesting to see how these change.

Same as tax on tabs and booze really – bastids!

its (mainly) luxuries that are VATable

No it isn't. Just about everything is "VATable" ……the big exception is food. And in 1985 the Tories slapped VAT on takeaway food. Well you couldn't have a situation where poor people weren't paying VAT on their chips – now could you ?

>yes so it regressive then thanks for agreeing

You win on the internets!

it has the same effect on everyone it's just that some people have more money than others

genius, utter genius

its (mainly) luxuries that are VATable

No it isn't. Just about everything is "VATable" ……the big exception is food.

Beyond Food and a roof over our head, neither of which are subject to VAT, what else do we really, really need? 8)

and a roof over our head

Glad you brought that up ratty.

In 1984 the Tories also slapped VAT on building alterations………..that Thatcher woman really was a bitch 😐

what else do we really, really need?

Personally, I need a Paul Sadoff-built replica Bontrager Race.

jaffa cakes remain unaffected, panic over.

Beyond Food and a roof over our head, neither of which are subject to VAT, what else do we really, really need?

The VAT on fuel (and the VAT on fuel duty) puts the price of fuel up, which puts up the price of pretty much everything; food included.

The Government need to ditch the Bank of England. Stop borrowing money and print it for ourselves.

Beyond Food and a roof over our head, neither of which are subject to VAT, what else do we really, really need?

XT

The Government need to ditch the Bank of England. Stop borrowing money and print it for ourselves

excellent plan Do you mind if I put you forward for the Noble prize for economics?
someone else agrees with you

excellent plan Do you mind if I put you forward for the Noble prize for economics?

I meant that the Government (ie. 'us') print it as opposed to borrowing from the Bank. I didn't mean that people start printing in their garage/cellar/shed/whatever.

I got to this post and then stopped reading!!:

Irrespective of your political persuasion it would be very difficult to argue that VAT was regressive, as it allows people to avid the tax by limiting spending, whereas income tax/NI gives Zero choice to avoid any tax. As for it having less effect on the rich, it has the same effect on everyone it's just that some people have more money than others…a fact that people don't like but is inevitable…….

and then couldn't avoid reading this gem just as I posted!!:

The VAT on fuel (and the VAT on fuel duty) puts the price of fuel up, which puts up the price of pretty much everything; food included.

The Government need to ditch the Bank of England. Stop borrowing money and print it for ourselves.

I couldn't help noticing that none of the three main parties, Labour included, took the opportunity to say they wouldn't raise VAT when given the opportunity during the election.

Are we really going to have 5 years of Labour complaining about all the things that they would have had to have done anyway if they'd won the election?

Oh, of course. Silly me of to expect anything different.

Printing money increases inflation, not sure we want more inflationary pressures now – interest rates could get nasty.

Poor grannies on fixed pensions don't benefit from income tax allowances, but are made poorer by VAT rises.

How is this fair?

Lets just put VAT on each pound coin so each coin now costs £1.17.5 pence, see easy.