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Should VAT be reduced to 15% watch

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    A cut in VAT would make products cheaper, and it will encourage people to spend more money.
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    (Original post by RedManc)
    A cut in VAT would make products cheaper, and it will encourage people to spend more money.
    Yes the VAT should definitely go down.

    Even the U.S.A, one of the most powerful countries in the world, do not even charge a VAT rate as high as 20%.
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    (Original post by yunglife)
    Yes the VAT should definitely go down.

    Even the U.S.A, one of the most powerful countries in the world, do not even charge a VAT rate as high as 20%.
    I do not know why the Government raised it in the first place. During the recession it was 15%
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    (Original post by RedManc)
    I do not know why the Government raised it in the first place. During the recession it was 15%
    I know right! This is what really pisses me off about this country,

    Everything here is so so expensive. The houses, the bills, the shopping - its all so expensive yet our US counterparts or even Australian counterparts get it way cheaper.

    Recently went to Tommy Hilfigers outlet store in the states and got a polo and a shirt for around $80 USD. Is about £50 which is really cheap. Would get a slap if I asked for the same prices from an outlet store here
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    (Original post by yunglife)
    I know right! This is what really pisses me off about this country,

    Everything here is so so expensive. The houses, the bills, the shopping - its all so expensive yet our US counterparts or even Australian counterparts get it way cheaper.

    Recently went to Tommy Hilfigers outlet store in the states and got a polo and a shirt for around $80 USD. Is about £50 which is really cheap. Would get a slap if I asked for the same prices from an outlet store here
    Agreed, although, I think the reason to why everything is so expensive is because of EU red tape
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    (Original post by RedManc)
    Agreed, although, I think the reason to why everything is so expensive is because of EU red tape
    Yeah that - but I think by reducing the VAT by 5% - there would at least be some hope of the prices being slightly cheaper.

    We are not living in a very hard-hit country. We have a VERY DIVERSE population and the economy is good here. Just think the government are being greedy here :P
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    No. VAT is my favourite tax. It doesn't distort markets (much) and you don't realise you are paying it. It doesn't stop people spending money. Nobody factors VAT into their consumption decisions. What are people going to do? Put off buying that TV in case VAT goes down by 5%? They should increase it to 25% over the next few years.

    If it was reduced to 15%, I doubt it would even be noticeable. Businesses are looking for an excuse to raise prices because of cost pressure anyway. I don't think prices would come down at all as a result. I would much rather they make the cut to income tax and then I actually get more money into my bank.
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    (Original post by yunglife)
    Yeah that - but I think by reducing the VAT by 5% - there would at least be some hope of the prices being slightly cheaper.

    We are not living in a very hard-hit country. We have a VERY DIVERSE population and the economy is good here. Just think the government are being greedy here :P
    Yeah, although the Government does need to be greedy as we've got a huge defecit. However, they are targetting the poor, as VAT effects poor people more.
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    The answer to this question is Yes for a number of reasons..

    1) As a tax on consumption it is a tax on growth (even if not much).
    2) By increasing prices it reduces the number of jobs created (lower prices increase consumption, consumption creates jobs)

    The only real caveats are..

    1) Taxing consumption is a very easy way to generate large tax revenues with a small cost to jobs and growth
    2) In less competitive markets the benefit may not be passed to the consumer

    (Original post by yunglife)
    Yes the VAT should definitely go down.

    Even the U.S.A, one of the most powerful countries in the world, do not even charge a VAT rate as high as 20%.
    Most public services in the UK are better to be fair and certainly more inclusive. The US also accounts for this by having higher taxation in other areas like corporation tax.

    (Original post by RedManc)
    I do not know why the Government raised it in the first place. During the recession it was 15%
    Government raised it because Osbourne was somewhat illiterate until he listened to the Lib Dems in 2012 and because with a deficit of 10%+ GDP, he needed to increase tax revenues significantly as fast as possible.

    (Original post by RedManc)
    Agreed, although, I think the reason to why everything is so expensive is because of EU red tape
    I voted Leave but this is simply not true. Indeed your also assuming we won't keep most of the regulation (we will).

    Our domestic governments (both Labour and Tory) have done more to increase the cost of living than the EU has.
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    (Original post by Rakas21)
    The answer to this question is Yes for a number of reasons..

    1) As a tax on consumption it is a tax on growth (even if not much).
    2) By increasing prices it reduces the number of jobs created (lower prices increase consumption, consumption creates jobs)

    The only real caveats are..

    1) Taxing consumption is a very easy way to generate large tax revenues with a small cost to jobs and growth
    2) In less competitive markets the benefit may not be passed to the consumer



    Most public services in the UK are better to be fair and certainly more inclusive. The US also accounts for this by having higher taxation in other areas like corporation tax.



    Government raised it because Osbourne was somewhat illiterate until he listened to the Lib Dems in 2012 and because with a deficit of 10%+ GDP, he needed to increase tax revenues significantly as fast as possible.



    I voted Leave but this is simply not true. Indeed your also assuming we won't keep most of the regulation (we will).

    Our domestic governments (both Labour and Tory) have done more to increase the cost of living than the EU has.
    It would be great if VAT was reduced to 15% and an increase on the top rate of income tax to between 47.5% and 50%
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    (Original post by RedManc)
    It would be great if VAT was reduced to 15% and an increase on the top rate of income tax to between 47.5% and 50%
    The top rate is 47% (don't forget the stealth tax - National Insurance).

    Instead of punishing success by increasing taxation i'd aim for a fiscally neutral tax reform by lowering the 45% threshold to £60-100k and then use that revenue to reduce VAT.
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    The government can't afford to cut VAT. Over the next decade, the government will need as much tax revenue as it can get or public services will crumble (more than already).

    Consumption is robust and I don't think it needs a shot in the arm but I guess it depends on what happens when we eventually trigger Article 50 and we discover what we let ourselves in for.
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    (Original post by Rakas21)
    The top rate is 47% (don't forget the stealth tax - National Insurance).

    Instead of punishing success by increasing taxation i'd aim for a fiscally neutral tax reform by lowering the 45% threshold to £60-100k and then use that revenue to reduce VAT.
    I agree, however, I think tax should be reformed completely.
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    (Original post by RedManc)
    I agree, however, I think tax should be reformed completely.
    Agreed. To do so would be time consuming, complicated and not for several years electorally rewarding if at all though.

    Hence why so few politicians have the stomach for huge tax reform.
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    (Original post by Rakas21)
    Agreed. To do so would be time consuming, complicated and not for several years electorally rewarding if at all though.

    Hence why so few politicians have the stomach for huge tax reform.
    The only politician who has done was Thatcher and she ruined the country
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    In my opinion, yes.
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    (Original post by Rakas21)
    Agreed. To do so would be time consuming, complicated and not for several years electorally rewarding if at all though.

    Hence why so few politicians have the stomach for huge tax reform.
    Agreed. It would near impossible to redesign the tax system from scratch. The Civil Service does not have the skills to deliver that, parliament doesn't have time to scrutinise it and the courts don't have the time to deal with the case load.

    The only way to reform the tax system is bit by bit over years.
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    The cut should be more selective. i would prefer energy bills to be zero rated- one of the few good things we could do post Brexit.
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    (Original post by RedManc)
    I do not know why the Government raised it in the first place. During the recession it was 15%
    It was a small matter of the massive deficit the country is running (and has temporarily forgotten about) which is racking up ever more debt. 20% VAT is reasonably comparable with other EU countries and nothing special. Besides, it is only on luxury, non-essential goods (on the whole) and if this Christmas' trading figures have anything to go by, isn't affecting spending at all.
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    (Original post by RedManc)
    The only politician who has done was Thatcher and she ruined the country
    No she didn't, I proved this to you , yet you still keep rambling on despite knowing the facts. Thatcher/major cut taxes from 83% to 40%. Are you suggesting we reverse these? Thatcher saved our economy and changed British politics forever .Hollande's 75% tax failed and had worse effects on the poor than the rich as the rich just left, the deficit soared along with unemployment.
    https://www.theguardian.com/world/20...rcent-supertax.
 
 
 
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