How about scrapping the VAT increase?

[HOGEPH]

Seeing that the economy is having a bad time this week due to the weather, in what should be the busiest time of the year, would it not be a smart idea to scrap the VAT increase in January in order to stimulate sales once the big freeze is gone?

Just an idea....

[Bing o]

So how DO you suggest we pay down the national debt then??????

No tax rises, no benefit cuts, we'll just ask Uncle Gordo to come down from his jock lunatic asylum and magic us up some more monopoly money like he did last time?

99% of people in the UK have NO IDEA how bad this is going to get. This is just the start.

[XJSJohn]

Was it Lawson or Lamont that dropped VAT as a way of stimulating a clattered economy in teh past, and it worked rather well i seem to recall.

Or am i talking out my 'arris?

[Bing o]

Guam said:

Bing o said:

So how DO you suggest we pay down the national debt then??????

No tax rises, no benefit cuts, we'll just ask Uncle Gordo to come down from his jock lunatic asylum and magic us up some more monopoly money like he did last time?

99% of people in the UK have NO IDEA how bad this is going to get. This is just the start.

Laffa Curve old son

Less IS more!!

I know full well about the Laffa Curve, but my point is we all wants cuts except when they affect us, and then we want them to happen to anyone but themselves.

XJSJohn said:

Was it Lawson or Lamont that dropped VAT as a way of stimulating a clattered economy in teh past, and it worked rather well i seem to recall.

Or am i talking out my 'arris?

IIRC (and google has worked) "In 1979, the UK had a Zero Rate, a Basic Rate of 12.5 per cent charged on "luxury" items and a reduced rate of 8 per cent charged on most other goods and services. When the Conservatives came to power that year, Chancellor Geoffrey Howe increased both of these to a single rate of 15 per cent, to partially offset the impact of large cuts to the Basic and Higher Rates of Income Tax. This was portrayed as a deliberate move aimed at shifting the burden of taxation from earnings to consumption.

VAT remained at 15 per cent until 1991, when Norman Lamont increased it to 17.5 per cent. This step was intended to provide revenue for the "Community Charge Reduction Scheme", aimed at assisting local authorities suffering from the fall-out of massive levels of defaulting on the "poll tax"."

[Mojocvh]

"Whilst I have no idea how big the problem may be in the UK, I would surmise given the news stories leaking out about government intent to criminalise the "average citizen" for making ANY cash payment (even for small amounts to the likes of a window cleaner), as indicative of government admitting that the scale of the problem is likely significant."

? Any more on this??

[Eric Mc]

XJSJohn said:

Or am i talking out my 'arris?

Yes. No Conservative fovernment has REDUCED VAT, as far as I can recall.

[Bing o]

Guam said:

Constant increasing of taxation just forces revenue OUT of the "Real economy" imho, it has been shown to fail for generations (hence the construction of the model). I doubt it is any different now!

And I don't disagree, I'm just confused that everyone wants stuff cut that impacts them - students - no fees, motorists, less taxes etc etc.

Why do you think XJSJohn and I shuftied off to a low tax haven (not together, I may add)?

It wasn't just the cheap beer and women....

[XJSJohn]

Eric Mc said:

XJSJohn said:

Or am i talking out my 'arris?

Yes. No Conservative fovernment has REDUCED VAT, as far as I can recall.

Thought that would probably be the case

[JagLover]

We have to reduce the deficit somehow and a tax on consumption (that exempts a number of basic goods) seems to me preferable to increased taxes on income.

A rise to 20% is also only bringing us up to the level in many EU states so is not unusual internationally.

[12gauge]

Doesnt really solve the problem, does it? Just delays it and brings demand foward.

I agree about sales taxes, but for some reason VAT is more acceptable that slapping a couple of pence on PAYE.

[Bing o]

Wonder how much this will increase inflation by? I assume not all goods will be affected in the RPI basket, but this will be added to fuel and taxed again will it not?

I fear that until the UK massively slashes benefits, and reduces taxes to stimulate growth, we will be fiddling around the edges.

[Spiritual_Beggar]

If anything, this VAT increase will stiffle the economy more than it will benefit it.

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

Then, when people actually spend 'more' because it is cheaper for them to do so (hence they buy more stuff than they would normally), you would actually see more tax income.

For example......how much unecessary crap will be bought in January.....JUST because it was in a 'sale'.

[Sticks.]

Bing o said:

Wonder how much this will increase inflation by? I assume not all goods will be affected in the RPI basket, but this will be added to fuel and taxed again will it not?

I fear that until the UK massively slashes benefits, and reduces taxes to stimulate growth, we will be fiddling around the edges.

Indeed, and interest rates may rise as a result of the increase in inflation. Demand falls, output and jobs decline.

[derestrictor]

None of this matters, to The Boy Chancellor. "Hic!"

[Dracoro]

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

[rich1231]

Dracoro said:

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

Spending generates income and tax receipts for and from others.

[Sticks.]

Dracoro said:

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

Fair enough if VAT didn't apply to so many everyday goods and services, whic are hard to avoid.

[Dracoro]

rich1231 said:

Dracoro said:

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

Spending generates income and tax receipts for and from others.

So does saving. It goes into banks who can then invest and make money on the savings. This employs a great deal of people.

Edited by Dracoro on Tuesday 21st December 10:07

[Dracoro]

Sticks. said:

Dracoro said:

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

Fair enough if VAT didn't apply to so many everyday goods and services, whic are hard to avoid.

VAT largely applies to "luxury" items (although in reality many things aren't). Heating fuel VAT hasn't risen (AFAIK) and i still 5%, food doesn't have VAT.

[Spiritual_Beggar]

Dracoro said:

rich1231 said:

Dracoro said:

Spiritual_Beggar said:

We need to be reducing taxes to encourage business to grow and do business, and people to spend!

If people do NOT spend, what do they do with their money?

I assume they have to then save it (or stop borrowing it in the first place). Is that such a bad thing? Excessive borrowing is largely what got us all into this mess.

Spending generates income and tax receipts for and from others.

So does saving. It goes into banks who can then invest and make money on the savings. This employs a great deal of people.

Edited by Dracoro on Tuesday 21st December 10:07

And look where that got us

I trust the banks as much as I do Politicians!! The financial industry is like nothing more than a gigantic Casino IMO. With few winners but lots of losers.

I trust 'proper' industries (those actually 'producing' things) to spend the money more sensibly than banks do (Fancy a 'sub-prime' anyone?)