Is it fair that the 20% VAT rate is to be permanent?
| Related: | Personal Finance•Tax•VAT |
David Cameron has intimated that the increase in VAT will become a permanent feature whilst the top rate of tax (50p) paid by top earners will be abolished.
The original reason for the VAT increase was the country's economic deficit but when the country returns to more profitable times it will remain. This is from a party who when in opposition said that VAT would not go up!
The only beneficiaries of this move are those who are already wealthy and can afford to purcahse goods at whatever the VAT rate is. The abolition of this rate will more than compensate them for the increase in VAT. The hardest hit, yet again, are those less financially fortunate. Perhaps the belief that the Tories ARE the party of the rich is being reflected in their decison-making.
Responses (6)
Ah Parchester when has anything ever been fair where tax has been involved.
No the amount won't go back down only up and up.
The other argument the Tories have always maintained is that if they keep taxing the rich then we'll go back to the 'brain drain' of the 1960's.
I'll post a brief article that may interest you.
http://careers.guardian.co.uk/careers-blog/a-new-brain-drain-
harry-freedman
So they have to be seen to be 'fair' by taxing commodities across the board.
The fact that they promised not to touch VAT just proves what we've known for a long time is that politicians are liars and can be neither believed or trusted.
Hi Parchester! No, of course it's not fair but how do you define fair when we have a government as radical as this one. You could ask is VAT fair in itself I guess .. nothing that raises money purely for the sake of it is never fair in the truest sense. But as you quite rightly point out, penalising the lower paid is undoubtedly unfair.
I think indeed the Tories are the party of the rich and that will never change. WE simply seem to live in a world where income generation is the new buzz word and there is no concern for those that cannot afford to keep up with that.
WE all hate paying taxes, don't we? I guess the only way not to is to live like a hermit, spend only on basic subsistence and deny the world around us. Not much fun though, eh?
In truth, I think too many people are denying the world around them because they believe they are impotent in terms of their ability to change their lot.
However, I sense, increasingly, that people are growing in their resistence towards having to subservently accept what is being dished out and this may manifest itself in people coming together to protest.
I think you are spot on Parchester. And i suspect that will be by people voting with their feet and never voting for a Tory or Libdem candidate again. Everyone has felt far too uncomfortable under the new government but we do need to stand back a tad and ask ourselves what the economy would do if everything had been left 'status quo'. What we don't want to see is reactive violence on the streets or public endangerment as a result of any resistence to government policy.
I still maintain that 2011 will be a year of radical change for many, many people. We are never going to return to the job for life policy with happy and snug retirements. The nations cashflow and infrastructure will never allow that. In a way, I fear for my children and their children.
A job for life Snoopy, oh those were the days.
Hubby also thinks that in time there will be anarchy on the streets, Lord help us.
I too fear for my children and grandchildren
Hey, what party isn't the party of the rich these days?
The Conservatives are no worse than Labour or Lib-Dems when it comes to keeping the rich wealthy and the poor working!
For me its better to tax the goods and services and reduce tax on actual income.
Those folk on benefits should be allowed to claim back the VAT.
I disagree about people on benefits reclaiming VAT. It's not charged on public services, food or books. I'd guess there's a case for allowing reclamation of VAT paid on fuel but that's about it. They shouldn't be able to get effective 20% discounts on TVs and game consoles!
Hi G-Man .. Surely even the people on benefits (genuine of course) need some luxuries - zero VAT for them would allow those very poor folk to at least have some extra joy besides the basic essentials?
If there is no income tax the 140 billion pounds or so the government gets through tax on salaries/bank interest/dividends etc etc will have to be got through VAT. VAT currently raises about 100 billion or so for the government, so to get 240 billion from VAT alone means VAT will have be about 50% - That's ok with me if there's no Income Tax ? Do you agree ... ?
No its daylight robbery
No i think its rotten especially with the hardship and taxes already being levied on us.
However I believe most other European countries actually pay 20% or more in vat correct me if I am wrong!
Mind you Britain is one of the highest taxed countries in the world now along with Iceland etc!
80.2p of each litre of fuel goes to the Exchequer. This is on top of road tax and MOT charges and fuel duty is expected to rise again on April 1st as are oil prices in general. We are seriously looking at £1.40p per litre by early April. At least in Iceland you can still get meals for £1. :-))
Yes but if they reduced fuel duty how would they pay all the asylum seekers their dole,council tax, medical etc.
Some people were accused of being reacist and that the asylum seekers costs were negligible years ago yet a few months ago I read a finance review that showed they were actually costing us over 1.5 billion in dss benefits.
Illegal workers cost the government 2 billion in lost taxes.
Costing the NHS over 135 million a year and these were all conservative estimates.
Hidden costs - Crime , Lawyers , Translators - its sheer madness yet we the British taxpayers are being penalised and made to suffer as we are now seeing.
How many people can a public infrastructure like ours accomodate is the question?
I think its creaking at the seams and it seems Conservative promises about limiting Asylum are going to be ignored so whats new!
Time to emmigrate!
Again an interesting yet disturbing paper Omendata and you figures are startling.
I too listened to every pre election debacle on immigration and I'm appalled at yet again another falsehood has come to light.
I understand the views and valid points for both sides of the argument but we were promised more intense scrutiny re the immigration and especially the asylum systems but I see very little change if any in the numbers.
Yes the infrastructure is crumbling and I don't know how much more this country can literally take but saying that I am in no way ready to emmigrate as each and every country has it's own problems to deal with either politically or climatically.
Ulimately I suppose we have to wait and see what happens if or when we ever manage to clamber out of this mess.
No, I think it's wrong. I also think it's wrong to apply VAT to fuel and basic adult clothing. Everything that's a 'need' - food, shelter, warmth, running water, sanitation etc. - should be VAT free. VAT should only apply to luxury items like TVs, games consoles, cars, holidays, designer clothers, jewellery etc.
Alternatively I'd like there to be no income tax and for VAT to be very high on non essential luxury goods, and for inheritance tax to be 100%. The poorest get cheaper goods, the wealthiest don't get to set up rich dynasties of trust fund layabouts and the middle earners get the chance to become very well off during their lifetimes.
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Sorry Parchester my link seems to have disappeared into the ether.
I'll try another one.
This was written in'07 and gives a brief synopsis of thoughts at that time.
http://www.thisismoney.co.uk/news/article.html?in_article_id=428647&in_page_id=2