Comments on: The VAT cut and higher-rate income tax increase: what will be the impact? http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html Our place to talk - an independent website for supporters of the Liberal Democrat party in the UK. Sat, 11 Feb 2012 08:55:56 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Liam Wiltshire http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-71389 Liam Wiltshire Sat, 29 Nov 2008 01:11:03 +0000 http://www.libdemvoice.org/?p=6205#comment-71389 Common sense says that the country will have to repay the deficit created by this VAT cut at some point. The 5% raise on income tax for high end earners will generate around £1.5 billion a year, so it will take just a measly 10 years to cover the deficit created in a single year! The government have already been forced to admit they were ‘considering’ raising the VAT rate to 18.5% in 2011. There is real reason to suspect the government will go ahead with these plans at some point - not only because they would generate an extra £5 billion a year! Add to this the fact that NI contributions will rise for everyone in 2011 as well, and you start to wonder if the government even realise there is a recession on.... [Shameless Plug:] I cover this topic and the whole VAT Rate Change topic on my own blog http://vatratechange.co.uk - I'd love to know your oppinion on what I've been saying - I'm not an expert by any stretch of the imagination, I'm just putting 2 and 2 together and realising the government is putting together one giant scam! Common sense says that the country will have to repay the deficit created by this VAT cut at some point. The 5% raise on income tax for high end earners will generate around £1.5 billion a year, so it will take just a measly 10 years to cover the deficit created in a single year! The government have already been forced to admit they were ‘considering’ raising the VAT rate to 18.5% in 2011. There is real reason to suspect the government will go ahead with these plans at some point – not only because they would generate an extra £5 billion a year! Add to this the fact that NI contributions will rise for everyone in 2011 as well, and you start to wonder if the government even realise there is a recession on….
[Shameless Plug:]
I cover this topic and the whole VAT Rate Change topic on my own blog http://vatratechange.co.uk – I’d love to know your oppinion on what I’ve been saying – I’m not an expert by any stretch of the imagination, I’m just putting 2 and 2 together and realising the government is putting together one giant scam!

]]> By: Darrell http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70755 Darrell Mon, 24 Nov 2008 15:18:58 +0000 http://www.libdemvoice.org/?p=6205#comment-70755 Anax, Well quite...taken together these measures still do not amount to an awful lot do they?? What they really amount too is getting Labour on a good pre-election footing...Darling really should rename this the 'Pre-election budget report'.... Anax,

Well quite…taken together these measures still do not amount to an awful lot do they?? What they really amount too is getting Labour on a good pre-election footing…Darling really should rename this the ‘Pre-election budget report’….

]]> By: Anax http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70738 Anax Mon, 24 Nov 2008 14:08:17 +0000 http://www.libdemvoice.org/?p=6205#comment-70738 Raising income tax is a necessary move by Darling, though it'll be eaten up by the ID cards and worthless IT projects. Tax avoidance is bound to dwindle with an Obama administration in the US and increasing worldwide hostility to tax havens. The argument that tax avoiders will always find a way is unconvincing, a similar argument could be made about currency forgers. Raising income tax is a necessary move by Darling, though it’ll be eaten up by the ID cards and worthless IT projects.

Tax avoidance is bound to dwindle with an Obama administration in the US and increasing worldwide hostility to tax havens. The argument that tax avoiders will always find a way is unconvincing, a similar argument could be made about currency forgers.

]]> By: Darrell http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70737 Darrell Mon, 24 Nov 2008 14:02:43 +0000 http://www.libdemvoice.org/?p=6205#comment-70737 I think the cut in VAT is ok but let's be honest it isnt really worth alot is it?? I read in the centre pages of the Indepedant the reductions but it doesnt make an awful lot of difference so i see it as a bit of a gesture to be honest... I think the cut in VAT is ok but let’s be honest it isnt really worth alot is it?? I read in the centre pages of the Indepedant the reductions but it doesnt make an awful lot of difference so i see it as a bit of a gesture to be honest…

]]> By: Mark Wright http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70704 Mark Wright Mon, 24 Nov 2008 12:14:27 +0000 http://www.libdemvoice.org/?p=6205#comment-70704 Geoffrey - what you're forgetting is that Vince was rightly convinced that there was an even better way of redistributing wealth than higher income taxes at the top end. Closing the top-rate pensions relief and other tax loopholes raised more cash in a more efficient way - that was why we dropped the 50p rate, not because we were opposed to the rich paying a bit more. I find it ironic that Labour sees fit to steal our policies only when we discover and even better way to do the same thing! Duh... Geoffrey – what you’re forgetting is that Vince was rightly convinced that there was an even better way of redistributing wealth than higher income taxes at the top end. Closing the top-rate pensions relief and other tax loopholes raised more cash in a more efficient way – that was why we dropped the 50p rate, not because we were opposed to the rich paying a bit more.

I find it ironic that Labour sees fit to steal our policies only when we discover and even better way to do the same thing! Duh…

]]> By: B http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70701 B Mon, 24 Nov 2008 12:06:28 +0000 http://www.libdemvoice.org/?p=6205#comment-70701 Hi guys, I found some debates about the PBR here: http://www.debatewise.com/pre-budget-report Currently LabourHome have a link to this but we should join the debate as well so it doesnt get too onesided! Hi guys, I found some debates about the PBR here: http://www.debatewise.com/pre-budget-report Currently LabourHome have a link to this but we should join the debate as well so it doesnt get too onesided!

]]> By: Geoffrey Payne http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70699 Geoffrey Payne Mon, 24 Nov 2008 12:04:13 +0000 http://www.libdemvoice.org/?p=6205#comment-70699 The argument Trevor Kavanagh makes against VAT cuts can equally by applied against the Lib Dem's income tax cuts. Of course the Lib Dem cuts are much bigger, although they only apply to those on low incomes who are in work, and not those out of work. However the more fundamental point is that more money in your pocket can pay off your debts and pay your fuel bills. Going on a spending spree would be silly, that is why we got in this mess in the first place. Interesting to note that Vince Cable now accepts the principle of the higher tax rate on high income earners. The argument Trevor Kavanagh makes against VAT cuts can equally by applied against the Lib Dem’s income tax cuts.
Of course the Lib Dem cuts are much bigger, although they only apply to those on low incomes who are in work, and not those out of work.
However the more fundamental point is that more money in your pocket can pay off your debts and pay your fuel bills.
Going on a spending spree would be silly, that is why we got in this mess in the first place.
Interesting to note that Vince Cable now accepts the principle of the higher tax rate on high income earners.

]]> By: Mark Wright http://www.libdemvoice.org/the-vat-cut-and-higherrate-income-tax-increase-what-will-be-the-impact-6205.html#comment-70695 Mark Wright Mon, 24 Nov 2008 11:54:30 +0000 http://www.libdemvoice.org/?p=6205#comment-70695 The 2.5% VAT cut is reasonable but: a) It might not be passed on - how is it that the underlying sale price plus VAT always "magically" comes out at £19.99 or something similar? Do we really think that with the cut now mean that all such items appear in the shops at £19.56? Of course not! Retailers have always fixed the prices to be these absurd "magic" levels and arent about to break them now. b) It is temporary. When it is increased again it will hurt proportionately to how much it was passed on. The 45% rate, well! It: a) Blows apart Gordon's hollow argument that abolishing the 10p rate was about <b>simplifying</b> the tax system by removing a band - because now just a few months later he has added another one again! He is clearly making policy on the hop. This shows that abolishing the 10p rate was a political stunt designed to out-manoeuvre the Tories, and so is this new 45% rate. b) It raises such a tiny amount of cash (£1.5bn) that even a slight push of top earners towards more tax avoidance will wipe it out completely. The Lib Dem proposals to <i>pay for our tax cuts now</i> by closing loopholes used by those with cash to spare and cut income taxes directly for the poorest still are by far the best package on offer. The 2.5% VAT cut is reasonable but:

a) It might not be passed on – how is it that the underlying sale price plus VAT always “magically” comes out at £19.99 or something similar? Do we really think that with the cut now mean that all such items appear in the shops at £19.56? Of course not! Retailers have always fixed the prices to be these absurd “magic” levels and arent about to break them now.
b) It is temporary. When it is increased again it will hurt proportionately to how much it was passed on.

The 45% rate, well! It:

a) Blows apart Gordon’s hollow argument that abolishing the 10p rate was about simplifying the tax system by removing a band – because now just a few months later he has added another one again! He is clearly making policy on the hop. This shows that abolishing the 10p rate was a political stunt designed to out-manoeuvre the Tories, and so is this new 45% rate.

b) It raises such a tiny amount of cash (£1.5bn) that even a slight push of top earners towards more tax avoidance will wipe it out completely.

The Lib Dem proposals to pay for our tax cuts now by closing loopholes used by those with cash to spare and cut income taxes directly for the poorest still are by far the best package on offer.

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