VAT accounts for 35% of the income of those in the bottom fifth of society but it accounts for 15% of the income of those in the top fifth of society.
Eoin, this simply cannot be true.
Imagine that everything, but everything, carried VAT at 20%.
Income of one of those bottom fifth is £100 (it\’s just an example, I\’m not recommending that this be what the poor actually have as their income). They spend all their income on those goods and services which are carrying VAT at 20%.
The maximum they can pay in VAT is £20: 20% of their £100. It just isn\’t possible that they can spend 35% of their £100 on a VAT which is charged at 20%.
You\’re simply asserting here something which is mind-garglingly wrong.
There are a few ways we can get to your figure: we could count consumption taxes on disposable income for example. So we\’ll strip housing costs out (which are non vatable), we\’ll include fags and booze taxes as being consumption taxes (which they are), note that the poor do spend a larger portion of their incomes than the rich on such things and I\’m sure we could credibly claim that consumptions taxes take 35% of the poors\’ disposable incomes while they only take 15% of the richs\’.
But your statement that VAT does is simply flat out wrong.