Polly should like this

A rise in VAT is looming whichever party wins the general election, as Labour and the Conservatives draw up plans to balance Britain’s books.

Alistair Darling and George Osborne, the Shadow Chancellor, are both considering raising VAT to as high as 20 per cent — the European average — from the current rate of 17.5 per cent, The Times has learnt.

It makes us more Swedish, more Nordic, more socially democratic.

Well, she would like it if she understood that point at least. Sadly though….

4 thoughts on “Polly should like this”

  1. Tim, you appeared to argue elsewhere that UK VAT effectively outlaws all those transactions it applies to where the margin is less than 17.5% (apologies if this is a mis-statement, but it seemed something like that).

    If this is what you stated, please could you expand on it?

    I find it hard to believe – given the benefits of trade – that we’d be stupid enough to employ such a tax. Surely other taxes would be less harmful?

    Tim adds: No, that’s not an argument I make. Mark Wadsworth does, but not me. At the risk of annoying him….VAT does have this effect but only at the final consumer stage (as it’s netter off down the manufacturing line). Yes, a transaction that might happen because it leaves the final consumer 10% better but no more off will not because there’s a 17.5% tax in the way.

    But then all taxes have such effects. And consumption is less mobile than either labour or capital, so perhaps that is where we should get our taxes from?

  2. I prefer low taxes but a shift towards consumption and away from jobs (corporation, income). Higher vat taxes imports the same as domestic production. Better we reduce the burden on do
    estic production and so wealth creation and jobs.

    So vat can rise if and only if taxes on income and corporations fall.

    Will the Tories do that? No*.

    * forget Labour.

  3. Brian, follower of Deornoth

    DB, and Roger Thornhill, the point at issue is the possibility of mass sackings of the public sector. Forfeiting of the pensions of these worthless vermin.

    Of course we can’t have that, so we have
    the choice between decent people bailing out worthless parasites, and worthless parasites being bailed out by decent people.

    Ain’t democracy great?

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