So VATs that then, no VAT rise, so move along folks, nothing to see.

[Isitmebut]

Both main political parties have given a definitive ‘NO RISE’ rather than the ‘not in our plans at the moment’ bullcrap we often hear, whether they know what they are doing after the election or not.

But why should we believe them, especially when both main parties had it in their plans prior to the 2010 general election?

The reason is WHY they had VAT rises in their plans at that time; the fiscal shock that UK Treasury tax receipt forecasts (always heavily ‘influenced’ by the incumbent party), were so rubbish over the previous years, the government annual budget deficit/overspend at £150 to £160 billion, became an un-forecasted financial crisis.

This was back before this parliament when the government independent Office for Budget Responsibility (OBR) was formed by Osborne, to both keep a government’s forecasts honest AND make sure there are no hidden shocks for a new government.

So why was the 2010 £150 odd billion government annual overspend (or annual budget deficit) such a problem, because the UK economy back then was growing relatively strongly ON that annual overspend and increase in government employment, so a large portion of that overspend/deficit had become what was known as a Structural Deficit.

“UK debt and deficit: All you need to know”
www.bbc.co.uk/news/business-25944653

In short a government Structural Deficit stays with a government (and taxpayers) no matter how the economy is performing, lingering like a fiscal equivalent of an eggy fart, and can only be reduced by spending cuts and/or tax increases.

So as in 2010 although the UK economy was growing, it needing rebalancing away from ‘the wrong kind of growth’, no spending cuts had been done/inked in - so as around £70 billion billion (of the total £150 odd billion deficit) was STRUCTURAL, a rise in VAT was the sensible way of paying that deficit off over time, starting asap in 2010.

So that was the difference between the 2010 and 2015 general election; much of the spending cuts are out of the way, we have ‘the right kind’ of GDP growth and if we stick to the current path, according to the OBR, we will no longer have a annual deficit by 2020, giving the UK options to begin REDUCING our accumulating National Debt - or pay for extra public services etc ‘stuff’ with cash English Pounds Sterling, rather than more BORROWING.

So why would the party with clear plans to go into a budget surplus by the end of the next parliament, NEED to raise VAT from 2015? Duh

I do hope tonight’s Cameron/Miliband TV cross examination by the Paxman and burley Kate comes up with some answers tonight at 9pm.

There are three/four main ways of getting rid of an annual budget deficit/national debt; above trend economic growth, government spending cuts, tax rises and raging inflation ‘inflating away’ some of the debt, sadly non existent at the present.

So for 5-years politicians that have OPPOSED virtually every spending cut, now BLAME the Coalition for not having got rid of a £150 billion annual overspend they passed them – yet say that THEY will get the deficit/overspend down to ‘balance the books’.

The Conservatives feel they have a deficit reduction plan and will NOT raise VAT, and Labour have ruled out their tax of choice for the next parliament, no National Insurance contributions.

So apart from Labour reintroducing the 50p top rate of income tax on 1% of the population, with tax raising projections of a net loss to raising £3 billion a year (versus a current £90 billion annual deficit) with the ruling out of mainstream income tax rises IN ADDITION to other ‘freezing’ of other taxes one has to ask for those refusing to outline areas where major government spending cuts will fall, what taxes WILL go up to ‘balance the books’?

Taxes on aspiration; homes in a favourite as the BIGGER the home, the more ‘the broad shouldered’ pays on Home Stamp Tax and Council Tax, so huge rises here could be labelled ‘fair’, right?

Private Pensions another ‘fav’, as few have to worry about it now, right?

A Tax of Death; who’s in a position to complain when their estate is raided by the State after the fact?

Fuel Taxes: Fuels cheap so for those telling energy companies they can’t raise prices if energy prices rise as fast as they fell, any tax on top is not just possible, its ‘just’, right?

And so it goes on if government spending cuts are not the main thrust of annual budget deficit reduction AND serious about cutting it.