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[Scruples]

That is such a twisted comment, I don't know where to start...

 

[Jacob]

I remember, 1974, Labour's Dennis Healey doubled purchase tax to 25%. Was that shifting the tax burden too? I think you make it up to suit your agenda, Jacob.

1974 purchase tax no longer existed, it had been replaced by VAT in 1973, at 10% then reduced to 8%.
Were you thinking of corporation tax? Healey in his first ever budget in 1974 increased it from 12 to 52%

 

[bansobaby]

If I lease a car to get to work I pay VAT at 20%.
If you buy shares in a car leasing business you don't pay VAT.
You are correct that some things that you do with your money to make more money are regarded differently.
Or are you implying that people with more money bury it in the back garden, so that it is not spent.

You decided to use the word luxury. You did not have to use the word luxury. You could have just stated 20% VAT rate.

Your statement that people would only pay tax at 20% on £50 is clearly wrong. You did not do the simple maths.

You pretend that tax at 5% tax is not a tax. This ignores the fact that most of the money raised contrary to your belief has to be raised at the 20% VAT rate.

It is you who makes the mathematically impossible statements. see my posts above.

I really don't get what point you are trying to make.

I took issue with an untrue statement. I tried to explain in what I thought were simple terms why it was untrue.

If someone spends £50 on 20% VAT rated goods, that is what they spend on those goods. Nothing more is implied.

I never said anything about the 5% rate other than to state that it is the rate on most energy costs. I most certainly did not "pretend that tax at 5% tax is not a tax" as you just stated.

And I really don't understand what car leasing has to do with it. Other than that VAT is charged on some things and not others.........

 

[D_W]

What maths you have not shown any.

Bottom 20% spend 10% of dispoable housahald income on VAT the top 20% of households 5% on VAT.

https://researchbriefings.files.parliament.uk/documents/CBP-8513/CBP-8513.pdf

that report kind of makes it look like the poor should send the rich some Christmas cards with a "thanks".

Rich pay the most, they pay the highest rates, and their benefits received are the lowest.

As the share of taxes has been skewed more toward them, the economy has gone to manure in the UK.

I'd ditch the VAT as it's just a way to split up tax burden to make people think a combination of various taxes isn't as bad as one big one that's more honest.

Looks like it's more than returned back to the households in cash benefits, though, when you compare net benefits with VAT.

Of course, we have a sales tax here in the states - it's just paid at the end of the process, but not on food and in some states (including mine), not on clothing, either.

 

[Scruples]

1974 purchase tax no longer existed, it had been replaced by VAT in 1973, at 10% then reduced to 8%.
Were you thinking of corporation tax? Healey in his first ever budget in 1974 increased it from 12 to 52%

You're right about it being VAT. But not about the rest - In July 1974, Labour Chancellor Denis Healey reduced the standard rate of VAT from 10% to 8% but introduced a new higher rate of 12.5% for petrol and some luxury goods.[4][7][9] In November 1974, Healey doubled the higher rate of VAT to 25%.[7] Healey reduced the higher rate back to 12.5% in April 1976

 

[TRITON]

that report kind of makes it look like the poor should send the rich some Christmas cards with a "thanks".

Rich pay the most, they pay the highest rates, and their benefits received are the lowest.

I think you have to look at it proportionally also, the poor making up the larger percentage of the population, and income for income pay the larger share.

 

[D_W]

I think you have to look at it proportionally also, the poor making up the larger percentage of the population, and income for income pay the larger share.

I looked at the percentiles. Taxation becoming more and more progressive is just a byproduct of two things:
1) it's politically palatable until the wealthy start to leave, even then, you can just trash them on the way out
2) over time in stable markets, the wealthy will continue to work when they don't really need to and continue to accumulate money until they have a come to Jesus moment and decide they're done working (that can be because they went to Jesus, though sometimes realize it earlier).

I have no problem with a progressive tax system, but I feel like a sports fan - I want to make sure my team keeps the star players, too.

The share of direct income taxes in the US is even more progressive, but top side income-related wealth is probably higher and the social benefits available to all generally don't start until about age 65. Translation, if the low income folks are receiving credits instead of taxes, they are paying some of that unpaid share in medical costs, etc, it's probably a fair trade on average.

VAT style taxes have been proposed here to revamp income, cap gains and sales taxes, but they are always less progressive than the system already in place. I consider things like VAT, Sales taxes, and cigarette taxes just to be a way to hide the total tax effect, and they often disadvantage the poor.

In NY state, here, the average low-income smoking household spends 24% of their income on cigarettes!! The narrative is the money has to be collected because they're a burden on the system (all smokers), which ignores the fact that smokers in general are a much lower lifetime burden on the system.

 

[TRITON]

@D_M
In the UK there are 1.2m earning over £100k. Percentage earning over £150k is 1%.
Population of the UK is 67.33 million.

Kind of leaves a heck of a lot of people to fill the coffers of the treasury to the tune of £915b.

I dont think anyone can say that the small percentage of the rich here in the UK pay more collectively than the poorer sections.

In NY state, here, the average low-income smoking household spends 24% of their income on cigarettes!!

But they pay tax on those ciggies. In fact its probably the main reason that cigarettes arent illegal due to their toxicity.

 

[johna.clements]

I really don't get what point you are trying to make.

I took issue with an untrue statement. I tried to explain in what I thought were simple terms why it was untrue.

If someone spends £50 on 20% VAT rated goods, that is what they spend on those goods. Nothing more is implied.

I never said anything about the 5% rate other than to state that it is the rate on most energy costs. I most certainly did not "pretend that tax at 5% tax is not a tax" as you just stated.

And I really don't understand what car leasing has to do with it. Other than that VAT is charged on some things and not others.........

Here is your post again.

Disposable income being what is left after tax is the Uk Government definition.

Most accepted definitions of disposable income are that it's what is left after you have kept yourself alive.

If you spend, for example, £800 of your £850 income on zero or reduced VAT rated items to stay alive then the rest on "luxury" full VAT rated items, you have either spent 20% or thereabouts of your "income" on VAT or about 2.5%.

I imagine that those in the higher income brackets would have to be dead to spend less than 2.5% of their expenditure on VAT.

I don't necessarily disagree with some of the sentiments being expressed, but twisting already highly dubious statistics should be left to politicians.

I stated that the Bottom 20% spend 10% of disposable household income on VAT the top 20% of households 5% on VAT and supplied a reference.

You clearly reference in your example a person who only pays VAT at 20% on £50. You also clearly reference the 5% rate, also know as the reduced rate, being used for part of the other £800.

You then state that your example only pays 2.5% of their expenditure on VAT. The government gives a figure of 10% four times as much as your example.

We are not comparing individuals but groups of people. Unless you can show that there is a significant group of low income people who only pay 2.5% of their expenditure on VAT your example is "an untrue statement"

The government figures of about 10% and 5% are of course averages (do not know what type). There will be some poor people who live in a tent on lentils who pay very little VAT. There will be rich people who fill there house with gadgets who will pay more VAT.

I have shown that your example does not reflect reality. People will be paying VAT at 20% on a far higher amount than £50 (excluding lentil eating tent dwellers).



I compared VAT on car leasing with no VAT on buying shares in a car leasing business. You stated that not all income is spent and I gave an example of how the income may be used. I do not beleive that rich individuals bury their income in the back garden, do you. This obviously has some relevance when comparing the VAT expenditure of different groups of individuals.

 

[Phil Pascoe]

My uncle used to bring me boxes of King Edward cigars in the early '80s, he had a house in Florida. One for one they were cheaper than cigarettes in this Country.

There are anomalies whatever the tax. I had an off licence, and the things that always messed up my books - salted nut carried VAT, nuts and raisins didn't, and gas and petrol lighter fuel - petrol carried VAT and gas didn't.
I remember in the early '70s when purchase tax was used instead of VAT receiving promotional ashtrays that were actually two ashtrays interlocking to form a box - ashtrays were taxed iirc at 33%, these were taxed much less because they got away with not being classed as ashtrays.

 

[Phil Pascoe]

I dont think anyone can say that the small percentage of the rich here in the UK pay more collectively than the poorer sections.

Apparently the top 3000 tax payers pay the same as the bottom 9,000,000.

 

[bansobaby]

Here is your post again.


I stated that the Bottom 20% spend 10% of disposable household income on VAT the top 20% of households 5% on VAT and supplied a reference.

You clearly reference in your example a person who only pays VAT at 20% on £50. You also clearly reference the 5% rate, also know as the reduced rate, being used for part of the other £800.

You then state that your example only pays 2.5% of their expenditure on VAT. The government gives a figure of 10% four times as much as your example.

We are not comparing individuals but groups of people. Unless you can show that there is a significant group of low income people who only pay 2.5% of their expenditure on VAT your example is "an untrue statement"

The government figures of about 10% and 5% are of course averages (do not know what type). There will be some poor people who live in a tent on lentils who pay very little VAT. There will be rich people who fill there house with gadgets who will pay more VAT.

I have shown that your example does not reflect reality. People will be paying VAT at 20% on a far higher amount than £50 (excluding lentil eating tent dwellers).



I compared VAT on car leasing with no VAT on buying shares in a car leasing business. You stated that not all income is spent and I gave an example of how the income may be used. I do not beleive that rich individuals bury their income in the back garden, do you. This obviously has some relevance when comparing the VAT expenditure of different groups of individuals.

Sorry, I’m totally confused as to even roughly what you trying to say…..

 

[Terry - Somerset]

The debate depends on the use of selective statistics used to support a particular argument. It has nothing to do with right or wrong, it is the territory of the worst kind of political rhetoric - eg:

• there is a fundamental difference between the burden of VAT and other indirect taxes on disposable income and total income as it relates to different income groups
• there is a basic difference in concept between percentage of income paid in direct taxes vs the amount of total tax paid by each income group.

There is no point in a debate with Jacob - he is so utterly convinced his arguments are sound, and the selection of relevant statistics and data so righteous and accurately described, that alternative propositions cannot be entertained.

 

[johna.clements]

that report kind of makes it look like the poor should send the rich some Christmas cards with a "thanks".

Rich pay the most, they pay the highest rates, and their benefits received are the lowest.

As the share of taxes has been skewed more toward them, the economy has gone to manure in the UK.

I'd ditch the VAT as it's just a way to split up tax burden to make people think a combination of various taxes isn't as bad as one big one that's more honest.

Looks like it's more than returned back to the households in cash benefits, though, when you compare net benefits with VAT.

Of course, we have a sales tax here in the states - it's just paid at the end of the process, but not on food and in some states (including mine), not on clothing, either.

There are countries in Europe that tax more than the UK and have a higher GDP. I think it is more about what you do with the tax than the exact rate.

 

[Jacob]

• there is a fundamental difference between the burden of VAT and other indirect taxes on disposable income and total income as it relates to different income groups

Differet yes, we are comparing the differences, but in what way are they"fundamental"?

• there is a basic difference in concept between percentage of income paid in direct taxes vs the amount of total tax paid by each income group.

Yes but so what are you trying to say?

....s so utterly convinced his arguments are sound, and the selection of relevant statistics and data so righteous and accurately described, that alternative propositions cannot be entertained.

You don't believe in facts?
I realise that they are often a surprise, especially to people who just idly rely on preferred opinions, picked up in golf club bars etc.
I surprise myself as I dig and delve! I hadn't realised quite how high taxes have been in various eras and how low they are now.
You should have a go at "relevant statistics and data" yourself, save me from having to research and spell out the inconvenient truth!
PS Facts are OK you know. It's not like cheating at Mastermind; the rules allow the looking-up of facts. If in doubt you can always check them yourself.

 

[johna.clements]

Sorry, I’m totally confused as to even roughly what you trying to say…..

The Bottom 20% spend 10% of disposable household income on VAT the top 20% of households 5% on VAT.

Your idea that a significant number of low income households (excluding lentil eating tent dwellers) only pay 2.5% VAT is not true.

 

[D_W]

There are countries in Europe that tax more than the UK and have a higher GDP. I think it is more about what you do with the tax than the exact rate.

I'm guessing it is a complicated combination of things - but one of those would be making the environment friendly to business even if it is high tax by making the environment predictable, not overly cumbersome to meet regulatory needs, and by providing a workforce that's efficient and reliable.

That can be done in a high-tax environment.

 

[Jacob]

There are countries in Europe that tax more than the UK and have a higher GDP. I think it is more about what you do with the tax than the exact rate.

Size of tax take as proportion of GDP is a crude measure of, and correlates with, civilisation and quality of life.
UK is well down the list. Below Spain, well below Cuba, just above Moldova wherever that is. Rapidly becoming a 3rd world country, particularly noticeable with regards to EU members - we are being left behind.
https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio
Would it be a good idea to put up a warning on posts like this one?
"This post may contain disturbing facts, not suitable for children and people of a nervous disposition"

 

[johna.clements]

The UK has been a very unpredictable place for the last few years.

The regulatory environment changes day to day. Yesterday they delayed the introduction of the UKCA mark for another two years (third time I think). UKCA is a duplicate of the EU's CE mark, same standards. To sell in the UK products would have to have it. So it is a duplication of cost for no benefit apart from being a UK government requirement. Does business spend more money on it then have the government give up on the idea or not bother and risk not being able to sell their product in the UK.

 

[John Brown]

Sales tax in the USA is weird. You have no idea what it is until you check out. At least over here, the prices on the shelf include the tax.
I expect there's some reason for this, but it's still weird. Does sales tax apply to everything at the same rate? Do people get to the checkout, and realize they can't afford stuff?