33 replies to this topic

[Bedford Roughyed]

Which would you of increased?

Tories have gone for a VAT increase, Labour (according to Alan Johnson) would of increased National Insurance. Which is better a tax on your spending or a tax on what you can spend?

Also Alan Johnson said Labour would of reduced the deficit by 60% tax rises and 40% spending cuts.

[Bob8]

I would like to see working to be lightly taxed and unearned income to be highly taxed.

[getdownmonkeyman]

VAT is an easy catchall. It impacts on every last one of us (with the exception of those who claim for all their expenses...).

Path of least resistance and all that.

[Derwent]

You can bet that retailers will be exploiting the VAT rise to the full, playing on people's ignorance and inability to do maths. Things that were £9.99 will be £10.49 instead of £10.20 and the retail staff will say its due to the VAT rise and people will agree and they'll all have a good moan about the government etc etc

[shrek]

You can bet that retailers will be exploiting the VAT rise to the full, playing on people's ignorance and inability to do maths. Things that were £9.99 will be £10.49 instead of £10.20 and the retail staff will say its due to the VAT rise and people will agree and they'll all have a good moan about the government etc etc

Yep, I was on a customers site today and noticed in the canteen a sign saying that prices were going up 5% with all rises rounded up to the nearest 10p thank the increase in VAT.

For me, at least you've got the option with VAT on your big ticket items should you wish to go ahead and spend and if that extra £10 is going to put you off the big screen TV you probably should have been thinking twice in the first place.

Most will be caught out with things you can't avoid, such as fuel and heating bills, but then they've been screwing us over for ages with wholesale prices/oil prices never seemingly ever working in the consumers favour. But I guess the VAT increase makes a better headline for the press till the next protest comes along.

[my missus]

i'd like to have seen a tax on the internet our deficit would have been wiped out in a month.

[ckn]

VAT is a personal tax, it's transparent to most businesses and it rarely stops people spending. It means a rise in VAT is least likely to generate industrial action or a cut in donations to political parties.

NI is a noticeable tax rise as it directly impacts how much people get into their account at the end of the month. If they target business NI contributions then that directly impacts how much profit (or loss) companies earn.

If I could choose one tax to increase it would be to remove the duty and VAT exemptions on aviation fuel used for international travel. Flying for the greatest majority of us is a greater luxury than the largest majority of things we "buy" that attracts VAT.

[my missus]

seriously though if we are in so much debt and it needs to be cleared quickly why not just take a lump some off every worker, a percentage of there wage take it for a few weeks or whatever it takes, get everything straight and then give us it back later.

[sam]

Which would you of increased?

Tories have gone for a VAT increase, Labour (according to Alan Johnson) would of increased National Insurance. Which is better a tax on your spending or a tax on what you can spend?

no idea, it's a question i've asked before. however, the whole point of the vat rise is to help pay down the deficit/debt so when this is done it should return back to 17.5%, but i bet it wont.

Also Alan Johnson said Labour would of reduced the deficit by 60% tax rises and 40% spending cuts.

considering he said they'd identified £70bn worth of cuts that would mean around £100bn of tax rises.

[exxile]

Most will be caught out with things you can't avoid, such as fuel and heating bills, but then they've been screwing us over for ages with wholesale prices/oil prices never seemingly ever working in the consumers favour. But I guess the VAT increase makes a better headline for the press till the next protest comes along.

VAT for gas, electricity, oil and solid fuel for home heating is charged at 5%. Was before, and still is.

[exxile]

There is no VAT on basic foodstuffs, i.e. meat, vegetables, fruit.

However, if your diet comprises cakes, crisps and takeaway pizzas, then you'll be paying more.

[JohnM]

I would like to see working to be lightly taxed and unearned income to be highly taxed.

Agree absolutely, but be careful of what you wish for as you might get it. How about capital gains tax on the sale of one's main home, given the huge rise in property prices over the last 15 years where that increase has clearly been unearned.

[shrek]

VAT for gas, electricity, oil and solid fuel for home heating is charged at 5%. Was before, and still is.

Fair enough, point still stands though that the increases here will hit more harder and general ignorance (as shown!) will no doubt right it off against the VAT increase and not the opportunism of energy supplies to constantly screw us over.

[shrek]

However, if your diet comprises cakes, crisps and takeaway pizzas, then you'll be paying more.

Switch to tortilla chips, VAT free apparently!

[exxile]

Fair enough, point still stands though that the increases here will hit more harder and general ignorance (as shown!) will no doubt right it off against the VAT increase and not the opportunism of energy supplies to constantly screw us over.

Maybe someone will start a thread on energy security, where we can discuss why we are going to be paying a lot, lot more for our energy; way beyond what you think is expensive right now.

You see those windmills on the horizon. Have you seen their blades move at all since the beginning of December, i.e. the start of the cold spell?

[JohnM]

Just looked and yes, they are moving at this very moment.I'll report back on the ones out at sea later when I get back from the gym. They have of course been sited where it is generally windy.

Agree about energy security, a factor seemingly ignored by past ( and present, probably) governments. Need to accelerate nuclear renewal.

On VAT increase, Miliband says it will cost the average family an extra £400 a year. This then implies that the average family spends £16,000 a year on items which carry the full rate of VAT.

No Vat on rent, no vat on mortgages, generally no vat on food, though some is at 5% and some at 20%.........

and for lovers of European harmony or the peculiarly European brand of corporatist socialism, here are some VAT rates

Denmark, Sweden, Norway - 25%
Finland, Poland, - 22%
Portugal - 21%
Italy - 20%
France - 19.9%
Germany - 19%
Spain - 18%

[Bob8]

Agree absolutely, but be careful of what you wish for as you might get it. How about capital gains tax on the sale of one's main home, given the huge rise in property prices over the last 15 years where that increase has clearly been unearned.

Which would have the effect to depressing house prices. A good thing. Indeed, it would mean working would become a slightly improved earner versus property investment.

[bowes]

I would like to see working to be lightly taxed and unearned income to be highly taxed.

At least equalising capital gains with the top rate of income tax would be a start (whether at 50% or more likely equalising them both (roughly) in the middle at 40%). Though definitely lower the tax burden on low earners as this is one area Labour are far to the right of the conservatives (and in fact even UKIP) in setting punitive taxes on low earners.

[Steve May]

Though definitely lower the tax burden on low earners as this is one area Labour are far to the right of the conservatives (and in fact even UKIP) in setting punitive taxes on low earners.

Table 6 is of particular interest.


And that's money, not wishy washy "benefits in kind".

By quintile from top to bottom, not including benefits in kind, just cash

Lowest - £1 earned = £1.15 in pocket
Second - £1 earned = 84p in pocket
Third - £1 earned = £72p in pocket
Fourth - £1 earned = £67p in pocket
Top - £1 earned = £67p in pocket

That's what I call punishing people with low incomes by taxing them to the hilt.

It's not as progressive as I'd like, but it's hardly fair to say that people at the bottom are paying lots of tax. They aren't paying tax at all. In fact, they actually get money out of the system. Almost all of the people hit by Labours evil 10% tax band were in fact net beneficiaries of the tax system, the system just became slightly less beneficial to them.

Almost all of the people who will supposedly benefit from the munificence of Nick Clegg "taking millions of low paid people out of the tax system" weren't really in the tax system in the first place.

Things get more complicated when you add in indirect taxes. VAT for example is quite viciously regressive despite what George Osborne says. Which is a good reason for not putting it up IMO.


Maybe what you meant was the combined effect of the tax and benefit system means that some people face punitive effective marginal tax rates when entering work for the first time or getting pay rises? In which case I agree with you.

[Bob8]

Table 6 is of particular interest.


And that's money, not wishy washy "benefits in kind".

By quintile from top to bottom, not including benefits in kind, just cash

Lowest - £1 earned = £1.15 in pocket
Second - £1 earned = 84p in pocket
Third - £1 earned = £72p in pocket
Fourth - £1 earned = £67p in pocket
Top - £1 earned = £67p in pocket

That's what I call punishing people with low incomes by taxing them to the hilt.

It's not as progressive as I'd like, but it's hardly fair to say that people at the bottom are paying lots of tax. They aren't paying tax at all. In fact, they actually get money out of the system. Almost all of the people hit by Labours evil 10% tax band were in fact net beneficiaries of the tax system, the system just became slightly less beneficial to them.

Almost all of the people who will supposedly benefit from the munificence of Nick Clegg "taking millions of low paid people out of the tax system" weren't really in the tax system in the first place.

Things get more complicated when you add in indirect taxes. VAT for example is quite viciously regressive despite what George Osborne says. Which is a good reason for not putting it up IMO.


Maybe what you meant was the combined effect of the tax and benefit system means that some people face punitive effective marginal tax rates when entering work for the first time or getting pay rises? In which case I agree with you.

I agree too. Why income tax should be paid on what is below a livable wage is a mystery to me.

I earn far more than I used to and tax is far less of a concern. My money goes to investments and property, which avoids VAT.