Tory's to hike up VAT to 19.5%

[magentadreamer]

Sorry it's a DM story but another reason not to trust the party that gave us record unemployment, sky high mortgage rates in the 80's the poll tax and sold off the family silver amongst other things.

www.dailymail.co.uk/news/election/article-1269677/Tories-secret-plot-raise-VAT-19- 5-emergency-June-Budget.html

sounds like a sensible way to raise money to me. They're going to have to do it somehow and this beats slashing NHS and schools budgets.

But VAT isn't fair - it hits those in lower incomes disproportionately. Income tax is fairer.

I doubt Education and the NHS will be untouched.

5-emergency-June-Budget.html your link

I don't see the article, even then, agree with Seth.

Selling the family silver....are you having a larf?

I would rather VAT rise than front line service cuts.
Something has to be done,and bloody quickly.
This country is on the edge.

Vat is a nasty tax but it is far cheaper to collect than income tax.

As the world seems to be in such a dire state would i be wrong in thinking that if we raised interest rates then money would flock into the country which would boost our economy?

"Vat is a nasty tax but it is far cheaper to collect than income tax"

I didn't know that - why is it cheaper Alouiseq? Surely if you're collecting income tax anyway a rise in rates would just cost the same?

Alouiseg, would be detrimental to raise interest rates as that would hurt business and consumer spending needed to keep the economy ticking over.

Also, the weak £ has been beneficial for export industry.

I think a tax that hits all sectors of society is fairer than a tax that always hits and puts upon the same old people. Why shouldn't we all do our bit?

animula, I don't think that's right though, lower income families don't necesarily pay more VAT as basic food, children's clothes, power, are all either 5% or 0% VAT, so that people on the lower incomes can still buy food etc without the prices changing.

Because it's collected by business. The companies charge the customer then forward it. It's difficult to evade.

Income tax is very expensive due to Hmrc's own rules. It is collected from business and individuals it is complicated and refundable. there are tiers and allowances to take into consideration.

Unfair because if you buy a vacuum cleaner you are paying same amount of tax as someone on a higher income - that's why it's disproportionate.

Yes, it's true, the poorer will pay less overall because they will buy fewer VAT-able goods. But the VAT on the goods they do buy will be a higher percentage of their income than for those n a higher income.

Animula - I see your point but many middle earners are feeling the pinch and struggling to make ends meet. Why is it fair that they should they constantly be thrown into the mix of people required to pick up the tab because it is just assumed they can afford it?

So you're saying the tories are proposing to up VAT to a lower rate than labour (are proposing) and yet you're still demonising them?

Have posted this before on MN so apologies if anyone has deja vu after reading - re. why VAT hits lower-income households disproportionately.

VAT is payable on fuel for starters (contributing to fuel poverty, a mjor problem for low-income households); adult clothing (bear in mind that most teenagers wear adult-size clothing); all appliances and white goods (why shouldn't low earners have televisions, fridges and ovens?); all sweets, savoury snacks, ice cream and lots of drinks (including fruit juices and smoothies); tampons, sanitary towels and postnatal items; car seats; alcohol, tobacco and petrol.

You could argue, of course, that some of these things aren't essential - but why should people on low incomes be reduced to living only on what is absolutely essential? That's one definition of relative poverty.

I wouldn't have a problem with VAT if it were charged only on genuine luxuries. But a cursory glance at the above list shows that it's charged on plenty of essentials (clothes, tampons, fridges, car seats) and lots of things that are necessary to a reasonable standard of living.

Magenta,
The tories may have sold off the family silver (did they?), but Gordon flogged our gold.

But PW, these people are in receipt of cash from the government. It is not as if they have earned every penny themselves, and already paid tax on it.

According to the fiscal studies bloke most economists are expecting VAT toreach 21% by teh end of the year regardless of who gets in

I don't care whether the cash came from the man in the moon, tbh. They're people on lower incomes and they can ill afford to lose any of it. People on higher incomes can afford to lose more than people on lower incomes. I realise that this is a stunningly obvious thing to say but sometimes it needs to be stated clearly.

That's just the problem. Too many people in this country don't care where the money comes from, as long as it keeps coming.

That's why we are in this horrid state right now and facing severe correction in our priorities.

It's all a question of perspective, Mme. IMO too many people in this country don't give a toss about people who are more vulnerable and disadvantaged than themselves.

Riven It's my understanding that both LibDems and Conservatives have both said they're unable to give any concrete proposals wrt economic cuts unless "Labour come clean about the state we're in". I expect whomever gets in will have to hold an emergency budget before the end of May and they whale oil beef oct.

Heating bills? Bloody awesome - sterling is being devalued against the dollar (e.g., quantitive easing - aka printing money) hence recent spiralling rises - this problem in the Gulf of Mexico right now will no doubt not smile on any of us who rely on fuel. That two-up, two-down has never looked more enticing! Up with fair isle jumpers and hot water bottles.