Saturday, Feb 13, 2010
But they won't put up interest rates! - And it was cheap money that caused the crisis!
Times: New tax bombshell: 20% VAT
''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.''
Posted by hpwatcher @ 08:33 AM (2616 views) Add Comment
51 Comments
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1. devo said...
"Doing so would raise an extra £13 billion a year at a time when financial markets are searching for signs that whoever takes power is serious about tackling Britain’s £178 billion deficit."
puts the scale of their problem in perspective
2. bystander said...
So we will all begin to pay the price for the financial mistakes made by GB et al at the whim of the City/ Wall Street, while those very same city 'types' won't consider a 0.05% tobin tax. I know they will have to pay this VAT increase as well, but in truth the financial industry should be covering more than their fair share, as it was their greed and the snake oil slesmen tactics they and their political/ media puppets used to dupe a niave and easily led/ ill educated public (global). The chinese, etc. are being led down the same speculative path, by the very same international financial institutions, and the very same snake oil salesmen, who are now peddling their fetid, diseased capitalist ideals to the developing countries. The future most definitely looks bright for those doing 'their gods' work, while for the rest of us it is fiscal enslavement and political/ media misdirection, Oh Joy!!!!!!
3. paul said...
"Doing so would raise an extra £13 billion a year at a time when financial markets are searching for signs that whoever takes power is serious about tackling Britain’s £178 billion deficit."
Should read "Doing so would raise an extra £13 billion a year at a time when financial markets are searching for signs that whoever takes power is serious about wiping up after it shat on everyone."
4. materialistic weasle said...
Slightly a side issue but has anyone seen this :
When VAT was temporarily reduced to 15%, the Chancellor added 2% duty to fuel to offset the reduction in tax collected from motorists. Now that VAT has been increased to 17.5% again this hidden tax has not been removed – hence recent rises in your fuel costs.
I also assume this will be carried through to the 20%
5. happy mondays said...
I predict a riot, what fools do they take us for !
6. fallingbuzzard said...
Fool enough to not have rioted yet.
7. the number cruncher said...
The comments section makes interesting reading (apart from the usual anti European, anti state sector and racist twaddle from reactionary morons)
There seems to be a widening realisation on the left, right and centre that the middle income earners are paying for the fallout of the bubble economy and that a vote for the Tories and Nu-labour will change little . Vat at 20% and increased employer NI are going to impoverish people who work hard for a honest and productive living to protect asset prices and those with a vested interest in keeping the asset bubble inflated.
Never in mainstream politics or media have I seen a positive story to increase capital gains tax or LVT to get us out of this mess. It is so depressing to see both the Tories and the Nu-Labour so utterly in the pocket of the vested interests of banking and the super rich.
8. devo said...
6. fallingbuzzard said... Fool enough to not have rioted yet
a tipping point has to be reached first
the vat increase is a small step towards that
public sector cuts will be a larger step
no wonder cameron doesn't want the top job!
9. alan_540 said...
If this houseprice bubble had happened under a Tory government I would not have been surprised, I am shocked that a socialist government has used it to stay in power.
Makes you wonder if the world really is run by the bankers and that politicians are little more than their puppets.
10. devo said...
"Makes you wonder if the world really is run by the bankers and that politicians are little more than their puppets"
it does, doesn't it
*sighs*
11. Major Des Aster. said...
At what level does the law of diminishing returns kick in? When will politician realize that there is a point when tax is too high and people will try to avoid it? VAT in Sweden is around 25%, consequently there is a large element of cash transaction in Sweden. The risk/reward element is such that it will happen.
20% VAT
"You give me cash and I will knock 10% of the bill, you save 10%, I get an extra 10%" Starting to look worthwhile to avoid Tax. The risk and reward element starts to look more attractive as the tax gets higher.
Personally a flat tax is the only fair way, regardless of the amount you earn. Once you understand that the rich will find ways to avoid high tax and the poor simple can't afford high tax, you come to the conclusion it is the soft middle that gets whacked.
I suggest 10% tax across the board, income, vat, inheritance, fuel and so on. After the initially shock to the system, tax take would increase. The initially shock, can of course be offset by printing a few more notes.
Why 10%- It is what most people tip in restaurants, even for average service and its easy to calculate on your tax form!
Also, 10% tax would ease the strain on public service as more of the middle earners can afford to go private and get a better level of service.
12. mark wadsworth said...
Excellent, they are falling into their own trap.
VAT is by far and away the most damaging tax (even worse than Employer's NIC), so this will just plunge us deeper into recession etc.
They're playing right into my hands.
13. devo said...
"this will just plunge us deeper into recession"
as will spending cuts of any description
their options have run out
funny that i knew this years before they did
14. happy mondays said...
@ fallingbuzzard , You can feel it, smell it, taste it,( Not GBs bullsh*t) but the sence of discontent in the air..
@ devo 8, Tipping point, yep nearly there, just keep pushing & pushing then watch the recoil..
@ mark w do you mean that with higher vat, less goods to be sold due to price increase & so the death spiral continues ?
15. Chilli said...
If the 20% tax curtails the development of the recovery, it is a false economy.
We need to encourage a re-organization of our economy to be more efficient and productive. This means encouraging small business, and breaking up the status quo. Letting bad banks fail and letting the housing market ride under market forces would be a good start. At the same time safe guarding the man on the streets savings, probably by re-instituting the old laws separating investment and retail banks. Breaking up the public sector to a more lean efficient engine where people who previously coasted along in quangos now seek productive jobs working for small business.
On the other hand this sentiment against bankers is undeserved. On the one hand we train them to 'always think of the investor first', that 'profit is their first imperative' and then we slate them for not being more benevolent. This isn't the bankers fault as much as it is bad governance. In a different context their mercurial outlook would be lauded as the proper free market attitude that develops efficient markets and contributes to efficient economies.
Any rise in tax would really be a case of closing the barn door once the horse has bolted.
16. Goldbug9999 said...
A recession is and always was unavoidable. By trying a "dash for growth", a strategy know not to work, we've ended up in a worse position than we started with and yet still facing an inevitable slump. We need an all out slump and a restructuring of the economy so lets just get on with it.
Basically we are past the point where we can pull levers to adjust this or that financial metric, its not about %x interest rate/growth/CPI/whatever anymore, we a need a fundamental restructuring.
We need new lean non-dept-dependent companies to rise from the ashes. We need over committed home owners to offload their houses at rock bottom prices to a new generation of consumers with real sustainable disposable income. We need people to work hard, save, and invest in real wealth generating businesses and not depend on "free money" from property inflation. We need to suspend final salary pensions for the public sector, slash the military to home defence levels only, dismantle the welfare state - create shanty towns for the scroungers to live in and remove their legibility for NHS health care (and then we will see if they still want to sponge of the state), halt all immigration including the asylum system. Reform the electoral system so that people in a real jobs have their vote count double or triple.
17. letthemfall said...
Increase in vat will further tilt the tax burden towards the low paid. Bring in progressive income tax and tax capital gains at the marginal rate.
18. freemanphil said...
They are talking about VAT on food and baby clothes. BASTARDS. Not even the Romans would have done something this tyrannical.
19. freemanphil said...
Apparently, asked how much tax Congress would get with 100% taxation, the Congress critters actually came up with a number. Of course, with 100% taxation, they would receive nothing, because there would be no production. The best way to increase taxation would be to stimulate production via tax cuts. If we got rid of income tax and defaulted on our fake debt to the Bank of England and other central banks, production would soar, and sales tax would reap in huge amounts of money.
20. hpwatcher said...
They're playing right into my hands.
:-)
21. dude said...
@ 9. alan_540
But we don't have a socialist government, and never have had. Whilst I was relieved that we had removed an uncaring and inefficient government in 1997 Tony Blair was never a socialist. You only have to look at the effort he went to to twist MP's arms to get them to accept students paying for their own education. That will have a *long term* effect and was disgracefully done for short term gains (to appease the middle classes -- like me -- who want to be able to fund large mortgages, drive flash cars, and all the other trimings of 'wealth.'
To even consider putting VAT up is wrong. They should put up income tax -- and then use the opportunity to make it farer by increasing the thresholds so only the richer pay. This argument that the rich can simply evade it is only true if the system is very complex, as it has become to try to reduce the political pain whenever they do anything. Whilst I don't agree with a flat tax, they can certainly make the whole tax system that much simpler, and so easier to enforce.
It's not difficult, but if the sheeple at large think it would be a good thing to increase the inheritance tax threshold to £1m then what hope have we for MPs doing the right thing? Maybe that's the long term plan -- reduce the general level of education so the masses can be taxed disproportionately more and so ease the burden of the rich.
I still blame Lawson's 1987 budget -- tw@t. :-(
22. devo said...
Maybe that's the long term plan
there IS no long term plan!
sheesh!
23. braindeed said...
9. alan_540 said...
If this houseprice bubble had happened under a Tory government I would not have been surprised, I am shocked that a socialist government has used it to stay in power.
When was that?
Makes you wonder if the world really is run by the bankers and that politicians are little more than their puppets.
....stopped wondering about that a long time ago
24. mark wadsworth said...
@ HappyMondays, yes that's exactly what I mean. VAT will just push more businesses over the edge (directly, because the higher tax puts them into making losses) or indirectly (because people have limited budgets, so will buy fewer goods and services) -> more unemployment, bankruptcies etc.
The notion that a hike to 20% will raise £13 billion is complete nonsense. At a rate of 17.5% total revenues are about £70 billion, so increasing by 2.5% would raise, superficially, raise £10 billion.
But unless businesses can pass that all on to the consumer (which they can't), then corporation tax and income tax receipts will go down by 33% thereof, bringing additional TOTAL tax revenues to £6 billion. Then knock off a bit more for businesses that now go out of business (we lose the VAT, the corp tax, PAYE and have additional welfare payments) and we arrive at £[ridiculously small amount and possibly negative].
Exactly like the 50% top tax rate, which arguably won't raise revenues at all.
25. alan_540 said...
@18 dude... We now know that New Labour are anything but socialist but we didn't vote them in on that basis, that's my point. I too think that income tax should be the main form of taxation, it's the only "fair" tax, after all if you earn twice my earnings then you should pay twice the amount of tax. Do away with VAT and all other forms of indirect taxation, and simply set a flat rate of income tax. It's simple and fair - no more disproportionate taxation of the poorest for gas and electricity, clothing etc. But of course that will never happen because the rich would never allow the burden of taxation to move from the lowest paid to them.
26. braindeed said...
21. mark wadsworth said...
A good reasoned argument against – your thoughts on where could a Government find the necessary, though?
27. clockslinger said...
Let us be realistic about the prospects for any real disruption on the streets, no matter what. There is a small 'riot' at a football match every week of the year. What is needed is a coordinated politically focussed series of big riots and targeted disruption. And last time that DIDN'T happen was G20 when a few broken windows at Barclays caused as much outrage as the death of a passerby from a blow by our dear protectors in the Met. So, puh-leeze...just rent Bader Meinhoff Complex and dream on.
By the way, can anyone tell me what happened to the IPCA investigation into the conduct of the officer(s) responsible, cause I appear to have missed it? Perhaps it is a case of "leave it long enough and we'll all forget, won't we"! Have a quick assault trail about the first week of the Olympics and offending officer back at work the following week after an acquittal (and suspension on full pay no doubt.) Thorny problem, have a lengthy investigation and as many inquiries as possible...but do nothing
28. braindeed said...
24. clockslinger said...
What is needed is a coordinated politically focussed series of big riots and targeted disruption.
Disagree - what would be achieved?......Police overtime, full jails and hand wringing- little else. What is needed is a realiasation from the population AS A WHOLE that the Financial Industry has turned the fire hoses on everyone else.(from you through to Coco).....and that they are criminals. Lets jail them and reclaim their assets - I'm not holding my breath though
29. devo said...
24. clockslinger said.. What is needed is a coordinated politically focussed series of big riots and targeted disruption.
why would that happen yet? people don't riot because they feel slightly miffed, or they've got a little less in their wallets at the end of the month.
when large numbers of people are sacked and/or chucked out of their houses, then you'll see some action
30. clockslinger said...
Yes, Devo, but how bad do you think it would have to get before a large enough, let alone politically hegemonous, proportion of the population were able and prepared to take on the massed ranks of the of the Met? And I am sadly convinced that Murdoch scattering a few free Mars bars on the pavement could easily distract the vast majority for long enough to stamp it all out well and truly. Can you help me with question on IPPC/prosecution of officer though, please?
31. clockslinger said...
Sorry, Braindeed @ 24...surely you are right. But If we haven't all cottoned on yet, then when? We've been told repeatedly how well they have shafted us, and for how long. But by the time job losses peak we will be being assured that the recovery is "well underway", which, given the cycle, it will be. So nobody will want to rock the boat at that stage...trusting things will get better. I just think the patterns in the past strongly suggest you will not get any meaningful or permanent concessions from power unless they are taken. Just look at the choice we all have at the election if you think asking will do it.
32. devo said...
27. clockslinger
this is the most recent info. i could find
IPCC to independently investigate complaint from family
of Ian Tomlinson
2 December 2009
The Independent Police Complaints Commission (IPCC) is to independently investigate a complaint from the family of Ian Tomlinson.
The complaint alleges that an Acting Detective Inspector gave incorrect information to a pathologist involved in the third post mortem.
The family submitted a complaint to the IPCC on 30 November 2009.
continues at.....
http://www.iantomlinsonfamilycampaign.org.uk/
33. clockslinger said...
Thanks, Devo
34. rumble said...
Agree with Clockslinger. The apathy is suffocating. Not helped by the police, licensed to kill.
35. mark wadsworth said...
@ Alan comment 24, nope, while a flat income tax would be a good replacement for a lot of things, even better would be a flat tax on property or land values - easy to collect, impossible to evade, easy to avoid - you just choose how much tax you are prepared to pay and then live in the appropriate value home.
@ Braindeed, apart from the fact that our government wastes a quarter or even a third of what it raises in tax, the best source of revenue is a flat tax on property or land values (see above).
36. braindeed said...
32. mark wadsworth said...
@ Braindeed, apart from the fact that our government wastes a quarter or even a third of what it raises in tax, the best source of revenue is a flat tax on property or land values (see above).
Ah, waste.....that old chestnut.....please apply similar princples to the ones illustrated in your argument @21.....then estimate how much you could usefully save when 'wasteful' public sector employees claim dole, avoid paying Imcome tax, spend less in shops and services, and avoid prescriction charges on the Prozac their doctor dole out.
37. devo said...
28. clockslinger said... by the time job losses peak we will be being assured that the recovery is "well underway", which, given the cycle, it will be.
what cycle?
what recovery?
I would suggest that you are seriously underestimating the power of the collapse that is now underway.
38. rumble said...
Revolutions & Revelations: http://hanswobbe.amplify.com/2010/02/11/dutch-to-ditch-cash-by-2015-report/
39. devo said...
won't happen, rumble (to their chagrin)
nor will this (from 2004)
The idea of having my very own microchip implanted in my body appealed. I have always been an early adopter, so why not.
Last week I headed for the bright lights of the Catalan city of Barcelona to enter the exclusive VIP Baja Beach Club.
The night club offers its VIP clients the opportunity to have a syringe-injected microchip implanted in their upper arms that not only gives them special access to VIP lounges, but also acts as a debit account from which they can pay for drinks.
http://news.bbc.co.uk/1/hi/technology/3697940.stm
40. devo said...
to their credit though, they never give up...
What hath PositiveID wrought: The company formerly known as VeriChip (purchased this month by IBM) seems to be the inspiration for bills in Georgia and Virginia that would ban the mandatory implant of microchips in humans by employers or insurance companies. And the company’s name is becoming increasingly associated with the “mark of the beast” mentioned in the Book of Revelation.
PositiveID (PSID) makes implantable microchips, one of which — Health Link — contains a scannable code that can link to your online medical records. Christians, conservatives and privacy advocates believe the company, perhaps in conjunction with the government, will somehow find a way to require that all Americans carry an implanted chip.
Microchip Implants Spur "Mark of the Beast" Bans in 2 States
By Jim Edwards | Feb 11, 2010
http://industry.bnet.com/pharma/10006653/microchip-implants-spur-mark-of-the-beast-bans-in-2-states/
41. the number cruncher said...
Completely off topic but I use Microchip ID's all the time in some of my work. I was using some on Tuesday on some wild horses (I also broke my finger that day while putting them in a corral)
I believe that one day all us humans will all have them or choose to have them, but will that effect our civil liberties? Now that is a complex question and I am finishing off a very nice South African merlot so will have to withhold my very contradictory thoughts on the benefits of technology against the dangers of tyranny.
I have just finished half an hour wrestling with a smart card reader to pay for a holiday - I would happily have a id chip inserted so I do not have to go through remembering all of my bloody account PIN numbers ext
42. devo said...
38. the number cruncher said... I would happily have a id chip inserted
and there we have it
i stand corrected - we ARE doomed
43. rumble said...
Is corral also a brit word, or are you in the US? (while we're off topic)
"I believe that one day all us humans will all have them or choose to have them, but will that effect our civil liberties"
They are convenient. I guess as long the individual is in control of when they can be read, then shouldn't infringe.
44. devo said...
40. rumble said... They are convenient. I guess as long the individual is in control of when they can be read, then shouldn't infringe.
et tu brute?
Please somebody... wake me up from this nightmare!!!
45. rumble said...
Well, any difference whether it's in my flesh or my pocket? As long as it can't be read from a distance, and preferably only when it receives certain nervous signals from the nut.
46. Mark Wadsworth said...
Braindeed comment 33; "estimate how much you could usefully save when 'wasteful' public sector employees claim dole, avoid paying Income tax, spend less in shops and services, and avoid prescriction charges on the Prozac their doctor dole out"
Dole and free prescriptions is a known figure, about £5,000 per annum per unemployed. This compares favourably with the £40,000 it costs per annum in salary, office costs, car allowance etc etc.
You can ignore the income tax they pay as that more or less nets off with the public sector pension entitlement they accrue every year.
Who's to say they'll spend less in the shops? Can't they get proper jobs cutting hair or driving lorries or painting and decorating or something? And don't forget a £1 reduction in cost of quangocracy = £1 tax cut = yer average hairdresser or lorry driver or painter and decorator will be spending £1 MORE in the shops.
47. Tochinoki said...
"They are convenient. I guess as long the individual is in control of when they can be read, then shouldn't infringe."
I think it's safe to be sure you'd have no such control. All power is abused.
48. Corriander said...
Devo@41 - I think you and I will just have to be grateful that we were born in the 20th century and will die before all the chipping and control get way out of hand because if even intelligent people like those that write on here think that microchips are a good thing then we are truly doomed
49. alan_540 said...
Yes wire the chip into the brain directly - good idea rumble!
Where can I go to get one of these wonder chips injected into me?
Second thoughts, I'll just stick to an old fashioned debit card thank you.
50. rumble said...
We're already connected, just that the man-network interface is crude - laptop - but we're all networked. We are borg, almost. A network is not subject to the same flaws as a hierarchy, a central authority, so it's not so worrying. On the internet, like a free market, the individuals participate in their own anonymous little way and structure emerges. A few learning experiences and we learn responsibility. A disproportionately powerful entity attempting to steer it causes imbalance.
51. Grizzley Bear said...
I see lots of argument against this proposed increase in state theft, even some condoning other theft as an alternative, get real! Tax even at current levels is already legalised theft, and possibly unlawful, it would be quite toxic if applied to all food, and possibly cause a noticeable Black Market to develop.
The Elephant in the room is Socialism, its degenerate elite and minions grossly distort the balance of disincentives and incentives, far beyond any error made by the little market Capitalism left; this is largely via the Welfare State, toxic Socialist legislation, central Banks, and the massive miss-allocation of resources to grossly incompetent states, thus these periodic booms and busts, which ratchet the evisceration of our culture, wealth, and currency!
Yes the elite bankers are not without guilt, because they always back the winner (and loser) and acquire it's loyalty, their employess just respond to banking 'culture', so little will be gained by attacking the minions, when it is the actual heads of the beast which need pruning.
I damn the Fabians and the Political Class for causing this mess, the monarchy for not vetoing it, opportunistic political parties for embessling the UK, and the sheeple who still haven't woken up to the real cause of their misery, but remain hooked junkies to the Socialist drug dealer called the The Welfare State! Most politicians are not the solution, but the cause of our problems.
Well, I'll do my damnedest to Starve these Monkeys, I don't care who they are, they need to go Cold Turkey, otherwise China (pragmatic communism) or Islam (a tyrannical theocratic political system) will end up lording over us, on far less pleasant terms than (free market) Capitalism, or even our current shambles!