BUt that is the point about an increase in income tax you are all paying it. With VAT it will be mainly the poor and middle class that will be paying it. If you are very rich you can afford to only need to spend a small fraction of your income on anything that attracts VAT.

But here's a thought. The people generally worst effected by VAT increases are as you rightly point out the lower and middle classes. This is also incidently the major portion of the Labour demographic. Since they've spent the last 13 years voting in the most incompetent bunch of cowboys ever to grace parliament, in particular when it comes to fiscal policy and balancing the books, isn't it only fair that they are the ones to carry the cost of their own stupid voting.

Yes and no. I think my thoughts on colour-based politics are known by now.

Since when do the rich pay less VAT? Since when do they buy less stuff that incurs VAT? Am I missing something???

For me, 2.5% on VAT will be significantly cheaper than 2.5% on income and I earn well under the national average.

I think that, given the increase in the tax free portion of our wages, a small VAT rise is fair.

Increasing VAT is better than increasing income tax, in my opinion, because it hits everyone - whether they are working, or not. Whether they even live in the country or not, they will still pay it.

It's often said that people don't work because life is too easy on benefits. Well, by increasing the VAT those people pay on all their luxuries, and increasing the personal allowance, it adds up to an incentive to work in my eyes.

The rich tend to pay a lot less on VAT as a proportion of their income in comparison to people on lower income because they often save / invest a significant proportion of their income, which incurs no VAT at all.

They still pay more in absolute amounts.

Yes but the government will have to up their benefits otherwise they would all fall below the poverty line and then face the criticism that they are making the poor even poorer to fund tax cuts for the rich, which they will do inevitably. It will also hit pensioners very hard who are on fixed incomes. With the increase in personal allowances a big increase in income from tax allowance will be swallowed up in VAT.

Even after the £700 tax back from the personal allowance increase?

Quite.



Exactement.



Whatever happens to the personal increase is a separate issue. Yes, I will be better off with a VAT increase, because to an extent I can choose to avoid it AND it doesn't apply across all of my money/income/outgoings.

What, by buying kids clothes and eating bread for the rest of your life?

But you have to look at the impact overall. What if the choice was 1% income tax or 2.5% VAT increase?

Point taken. I'm talking about luxury consumer goods that I can stop buying if I choose.

Amnesia, your choice is hypothetical atm, but whatever the numbers, I don't care. I expect VAT to go up at some point, it's not a big deal and whichever way you slice it, it's still leaves more choice than an income tax rise.

Either way, we don't get a choice, so why moan?

VAT is an "easy" tax. Just put it up and someone else collects it and it can't be avoided.

Yes it's unfair and hits the poorest harder, but gives quick and predictable income.

In fairness, the Tories made a proper meal of it as well - do you recall Norman Lamont and Black Wednesday?

A VAT increase taxes everyone, so while those of us on the lower end of the pay scale have our taxable income raised above £10k, we're no better off due to a VAT rise.
What a surprise. The point of a society should for those who can to help those who can't (not won't). Why not tax it off the top end instead? That means those of us on a minimum wage can afford to pay rent and be self sufficient, but Mr £100k p/annum loses a round of golf, maybe a Rolex.
Oh wait, that's right, because if you're on a minimum wage you're simply not trying hard enough or are clearly a benefits cheat.
An unfair tax rise, IMHO.

Talk of a VAT increase is also a psychological tact to encourage people to buy those things that they were going to buy sooner rather than later to help with recovery.

I'm not going to get into a who was worse, Labour or the last Tory Government. There's no competition. Thatcher and her ilk were insane and did their best to destroy any sort of cohesive society that there was.

One big advantage of VAT is that it almost impossible even for top earners not to pay. For income tax they can find 101 loopholes to get out of paying it. For Vat its collected at the point of sale so you have no choice.

Unfortunately our tax system is very complex and while ordinary people like us who pay tax via PAYE cannot avoid it as soon as you start getting your income from other ways then there are many legal ways in not paying / reducing tax