VAT's what we need

As the sunlight pours into the dusty cupboards where the previous Government hid all the bills, invoices and receipts, and we begin to discover the full horror of Labour's 13 years of financial mismanagement, it seems that Things Can Only Get Shitter

This mess isn't going to be fixed just by taking some civil servants bonuses away. Even a massive, savage slash at the Public Sector isn't going to keep the debt collectors from the door. There's gonna have to be some pain for the taxpayer. Never mind our children's children, we are going to have start paying off this massive debt.

One of the revenue raisers wee Georgie Osborne could use is an increase in VAT. CallMeDave Cameron keeps fudging the issue - will he, won't he? Does the ConDems "have plans" to raise VAT? 

The main problem with the raising of VAT will be the absolutely deafening whining and screeching from the whole of the left, and from the imbeciles who now form the opposition.

'Not fair, not fair, not fair' they'll chant. 'Hardest on the poorest'. 'No-one can afford it'.

But hang on a minute, let's have a little look at the facts, as eevil bankers Citi have done, shall we?

Firstly, what those lefties won't tell you is that across the 27 European countries that use VAT or its equivalent, only 2 - Cyprus and Luxembourg - have a lower rate than we do, and even then it's not much less - 15% versus our 17.5. 

So, 24 - also known as 'virtually all' - other European countries change more VAT than the UK - up to 25% in some cases.

Do they have impoverished peasants lying dead in the street? Have paupers begun to eat their own children? Probably not.

The boys at Citi reckon that if Georgie put VAT up to 20%, he'd raise 13 billion. Now that's a bit more like it. That makes all the scratching and scraping to find 6 billion look a bit feeble.

And then there's the 'applicability' of VAT - what gets VAT'd and what's exempt. In the UK, we 'zero rate' or exempt from VAT, among other things, books, children's clothes and food. How many other countries exempt all three of those things? Errrr ... none. Some of them do one or two, some of them VAT those things at a reduced rate but none of them zero-rate all three.

Again, if Georgie was bold, and put VAT at the reduced rate - 5% - on those items he'd raise another 8 billion. If he got really ballsy, and stuck the full 17.5% on them, ignoring the wailing and gnashing Guardianista's, he raise 27 billion. 

So, Georgie could make himself, and the Coalition, very unpopular with the left, and with those who believe everything they read in the Daily Mirror, but knock a 40 billion pound chunk out of our deficit, just by copying what, say, Sweden has done with VAT. Sounds like a good deal.

Come on boys, you're in power now. No need to keep smiling and promising us kittens. Let's make flat screen tellies cost a tenner more. Let's put 10 pence on the price of a Big Mac.

It's not exactly the fucking blitz, is it? We'll survive.

.

21 comments:

Uncle Marvo said...

Don't put VAT on essentials, because only a cunt would do that. Then hike it. Properly. 25% until the mess is sorted, regressive tax my ringpiece. Don't get me started on stats, it's my sodding job to lie to people with filthy figures, and I'm not even a banker.

It appears to me that if some fuckwit hadn't dropped it to 15% last time then we'd be better off already. Then again, if they'd had the decency to resign when Brown sold the gold, ditto.

Joe Public said...

Cammie/Clegg must raise it NOW; & steeply. So it is irrevocably associated with the Brown Inheritance.

Captain Haddock said...

Increasing VAT & other taxes to raise hard-needed cash is one thing .. but at the same time other measures MUST be taken ..

For example, if one compares the cash flow like a sausage machine ie cash in, cash out .. there's little or no point in strangling our own people at one end of the sausage-making process, yet allowing that additional revenue to haemorrhage away at the other end ..

So, ALL Foreign Aid, of ANY kind & for ANY purpose should be stopped, with immediate effect and for the foreseeable future ..

Once we can afford the concept of largesse once again .. the matter can be re-visited ..

Anonymous said...

Hmmmm..... You forget that high VAT will also have the effect of lowering demand.

Income tax raises all round please. Oh, apart from the rich?

Dippyness. said...

Been saying we have one of the lowest VAT rates in Europe.
20% sounds good to me. 5% on kiddies clothes... Seen the amount that get bought by the so called "hard up" parents for their sprogs?
Keep it off school uniforms.
Uncle Marvo is right. Dropping it to 15% was a massive con. :(

Hairy Ricky said...

My late father reckoned that we should scrap income tax altogether and bang the whole bloody lot on VAT. Have a reduced or zero amount on essentials like food. That way, you'd keep all the money you get paid. You could then choose how you spend it. New clothes, car, dishwasher, stereo you pay the tax. Thrifty, grow your own veg, brew your own wine, clothes from charity shops you pay less tax. It's your choice. Reward the thrifty, hard-working and innovative. Hammer the spongers. Never forget, you get a choice whether you pay VAT. You don't get one with Income tax & NI.

Anonymous said...

"Hmmmm..... You forget that high VAT will also have the effect of lowering demand.

Income tax raises all round please. Oh, apart from the rich?"

ANY tax rises reduce demand. In any situation where people have less disposable income, they spend less. Know what makes people spend less? Yeah, it's when the country goes bankrupt.

As CF points out, the rest of europe manages fine with higher VAT.

Macheath said...

Dippyness; I agree - the anachronistic zero rate on chidren's clothes and food dates from a less affluent era when prices were relatively higher.

School uniforms, textbooks and childrens' shoes exempt, along with raw, unprocessed food; VAT charged in full on ready meals, books and children's 'fashion'. Simples!

David said...

No, what we need is higher income tax on the wealthy and the closure of more tax loopholes for the very rich.

If rich cunts like Ashcroft want to put their money in the Cayman Islands, fine. They can fuck off and live where their money is, with British citizenship permanently revoked.

Making cunts like Murdoch and the Private Equity thieves pay their fair share will raise far far more than a few piddly pence on a Mars bar.

Do I expect to see Gideon Osborne tax the rich when he can fuck the poor, though? Do I fuck.

As for the rest of Europe having higher VAT, it is true, but only partially so. When you factor in all the other duties we slap on- fuel duty, alcohol duty, fags duty- we climb right back up to the top of the tax league.

VAT DOES unfairly penalise the poor, because it takes up more of their income. It also, crucially, slows down demand, which is the last thing we need at the minute. The reduction cost billions and was a complete fuck-up from the start, but it was only done to prop up profits for companies- so few passed the discount on at the till.

JuliaM said...

We elected them to make the hard decisions, didn't we? Not to make friends with everyone...

JuliaM said...

@David: you are just using rhe politics of envy here, talking about 'the rich'. How many of them are there? You could pass an instant-effect confiscation law (abturn 'em upside down and shake them law) and still not reduce the gap, not by much.

There just aren't enough of 'the rich' to make a difference...

Hairy Ricky said...

Oh I see,

"If rich cunts like Ashcroft want to put their money in the Cayman Islands, fine. They can fuck off and live where their money is, with British citizenship permanently revoked"

Well, squeeze them hard enough and they probably would, just jetting in and out as visitors. So we should also revoke their citizenship eh? Hand it out on a fucking plate to every chancer and handout grabbing economic migrant in the world but revoke it for someone born here who has, could and does pay a lot of tax here? A future fair for all. The beauty of high VAT over income tax would mean that the rich in offshore havens like Ashcroft would pay massive tax on their luxuries here, even if they pay zero income tax. They can always get accountants to sort their income tax, not so easy with restaurants & shops.

Our society is like a flat triangle and the rich are a very small number at the top relative to the total of number of middle and lower earners and people on state handouts. Even if we charged them 100% tax it wouldn't be enough to cover what we need right now. The lower and middle earners ALWAYS end up footing the bill. In any case the likes of Ashcroft, Murdoch etc al would shut up shop and fuck off elsewhere taking their money and jobs with them. You may despise the rich, but we need them in more ways than just for their direct tax.

FFS

M said...

"Making cunts like Murdoch and the Private Equity thieves pay their fair share will raise far far more than a few piddly pence on a Mars bar."

It really, actually, and genuinely will not. At all. Probably even if it WAS just a few pence on a Mars bar which obviously it isn't.

"As for the rest of Europe having higher VAT, it is true, but only partially so. When you factor in all the other duties we slap on- fuel duty, alcohol duty, fags duty- we climb right back up to the top of the tax league."

That's duty on demerit goods, it's totally different to VAT. And those duties may be higher than a lot of places in Europe, but our debt is higher than ALL the places in Europe. So I would still say a significant raise in VAT is needed.

We had it better than most of Europe from 1997-2005, because New Labour was pissing our money everywhere like an excitable puppy. Now we're going to have to pay for that, and have it worse than the rest of Europe. Unavoidably.

Anonymous said...

Here's the question tho: say they raise to make up the deficit, reduce the national for a few years.

When those things are behind us (say 10-15 years), do you think it will go back down to 17.5%? Or will the government of the day enjoy the extra cash to spend too much? Remember the lottery was supposed to free up additional cash that used to be spent on the arts, etc. Has it? Or has it all been wasted on non-jobs and quangos?

Regardless, raising VAT is a terrible idea. They should be *cutting* taxes to boost the economy and consumer spending to get more tax receipts through growth. Socialists believe in tax, tax, tax and I thought we'd got rid of them?

Hairy Ricky said...

Anonymous, I agree with you totally. That probably will happen. They should be cutting the spending on the public sector/welfare and lowering taxes. Unfortunately, I don't think it's enough to cover the deficit without making hundreds of thousands nay millions of public servants and welfare claimants riot in the street. The Poll tax would have been a tea party. Increasing VAT as unpalatable as it is, is probably the least painful solution. I would of course prefer the former solution though!

Brian, follower of Deornoth said...

"Even a massive, savage slash at the Public Sector isn't going to keep the debt collectors from the door."

When I've seen a million or so public-sector parasites dangling from lamp-posts, and another three or four million sacked, and the pensions of the rest of them halved, and large cut in all state benefits, then, and only then, will I contemplate paying any more tax.

Otherwise, I'm out of here.

David said...

@ JuliaM @David: you are just using rhe politics of envy here, talking about 'the rich'. How many of them are there?

I'm not really using the politics of envy.

I'm meaning the scum who run the private equity raiders who brag about "paying less tax than their cleaners". I'm meaning scum like Ashcroft and Murdoch who swan into this country, wank on about 'benefit cheats' and then bugger off again without paying any tax.

I'm not one for taxing until the pips squeak- it is counterproductive and also unfair. Those who earn money should get to keep as much as they reasonably can. But I don't see why my NICs, and my income tax, and my VAT, should have to be ramped up to pay for their tax-dodging.

The 'visitors' rules in this country are far too lenient. If people want to live here they can keep their money here and pay their taxes here. If they don't want to pay taxes here then fine, don't. But don't let them swan in and out of the country as they see fit.

I don't give a monkey's who lives here so long as they play fair and pay their fair share. And the problem with filth like Ashcroft, and like Applegarth, and like Goodwin, is that they take and take and take and never quite get around to giving.

@HairyRicky: In any case the likes of Ashcroft, Murdoch etc al would shut up shop and fuck off elsewhere taking their money and jobs with them. You may despise the rich, but we need them in more ways than just for their direct tax.

Bollocks.

Murdoch and the like need us too much. How's he going to make his money without access to UK customers? How's he going to make his money without a presence in the UK?

Just as the fat cats in the City won't go anywhere, people like Murdoch won't either. Making them pay their fair share won't make anyone move anywhere.

And lets face it, who the fuck would miss people like Goodwin if he did piss off? Best thing he could do is a 'Maxwell'.

Anonymous said...

"Socialists believe in tax, tax, tax and I thought we'd got rid of them?"

Believe me, you would not want to live in a Britain where the government tried to solve this mess through spending cuts alone. Because the spending would be in the negative numbers.

JuliaM said...

@David: "I'm meaning scum like Ashcroft and Murdoch who swan into this country, wank on about 'benefit cheats' and then bugger off again without paying any tax."

And never buy things while they are here, or run companies employing people here, or engage services while they are here..?

Your views on how a country should treat visitors are absurd.

Jill said...

You want to increase VAT now?! With inflation at 3.7%? Have you lost the plot, man? You people have all been yammering on about ZaNuLiebor for years. You want it to be ZaNuCoalition instead?

Besides, the revenue you're talking about doesn't take account of either reduced demand, as noted by commenters here, or increased benefits as outlined in the report whose figures you cite.

What do they say on Twitter?

#fail

Constantly Furious said...

"..the revenue you're talking about doesn't take account of either reduced demand, as noted by commenters here, or increased benefits.."

If we put VAT up to 25% (like the Swedes and the Danes) then a flat screen telly will go up by about 25 quid. Do you really think that will kill 'demand'?

A Big Mac will go up by about 20 pence. Do you really think we'll have to increase benefits to cover it?

I don't.