Richard Wellings of the IEA looks at the likely effect of the VAT rise and is not happy. If one stops bleating about the importance of keeping the coalition together and the Boy-King in Number 10 and looks at what matters: the country's economy and wealth creation, the situation is not good.
Let us not forget that the Chancellor has already told us that 20 per cent is here to stay indefinitely (for which one can read: I honestly don't know what to do except raise taxes) and, in any case, it cannot go below 15 per cent as the EU would not allow it.
Of course it has gone to 20%, that is what the EU require. All brownie points for the Cameron clique from their dearly beloved EU. You only have to look at the number of things that have been handed over to the EU in quick time over the last few months to know which way they are going. There is very little left for them to give so the "Sovereignty Bill" will not make one jot of difference.
ReplyDeleteWith public spending rising under this government and our borrowing currently at 3 billion per week this is nothing more than Tory tax and spend. Taxation is to increase by 174 billion over the next 4 to 5 years.
ReplyDelete2011 is going to be a tough year for a lot of people.
The EU does not actually require that VAT should be at 20%. That's a very strange notion. The EU does not allow it to sink below 15% but has no interest in how high it rises.
ReplyDeleteDoesn't the current (sixth?) VAT directive say that the tax must be between 15 and 25 per cent?
ReplyDeleteDoesn't mean it has to be 20 per cent, Clarence. It could be 15 per cent. As I keep saying it cannot go below that.
ReplyDeleteSure, Helen. I might have phrased it better. I was trying to pointing out that VAT can't go above 25 per cent, in case people had read your "the EU... has no interest in how high it rises" as being a licence for satrapies such as the UK to slap 50 per cent VAT on 4x4 vehicles etc.
ReplyDeleteOops, "pointing" should be "point". And the above was me.
ReplyDeleteFor the moment that's true, Clarence. I, too, could have phrased it better.
ReplyDeleteIf Osborne doesn't have the brains - or the balls - to do anything about our situation except raise taxes, then VAT is actually the right one to raise: as a consumption tax it's naturally progressive, to some extent avoidable (don't buy stuff and don't pay the VAT), and very difficult for the usual suspects to dodge. I expect MP's are all VAT-registered in their own names and so claim it all back, but apart from them it's pretty bulletproof.
ReplyDeleteA proper reforming chancellor would do the other thing, of course, but there's two Hopes of that happening.
If Osborne doesn't have the brains - or the balls - to do anything about our situation except raise taxes, then VAT is actually the right one to raise: as a consumption tax it's naturally progressive, to some extent avoidable (don't buy stuff and don't pay the VAT), and very difficult for the usual suspects to dodge. I expect MP's are all VAT-registered in their own names and so claim it all back, but apart from them it's pretty bulletproof.
ReplyDeleteA proper reforming chancellor would do the other thing, of course, but there's two Hopes of that happening.
Argh. I hate this commenting system, I definitely did not click Post twice.
ReplyDeleteI don't know who or what js-kit.com is/are but they/it suck(s) dead bunnies. Official.
Argh. I hate this commenting system, I definitely did not click Post twice.
ReplyDeleteI don't know who or what js-kit.com is/are but they/it suck(s) dead bunnies. Official.
Not sure why but multiple posting sometimes happens by accident. I think you can probably delete one (or two if it goes beyond that).
ReplyDelete