ChatterBank1 min ago
Direct taxation for private individuals.....
Is there an argument for abolishing altogether? The budget today is widely expected to reduce direct taxation so that more money in the pockets of the masses means that they have more to spend and hence pay more indirect tax. Is this an indication of the way forward? I mean what if we had no direct tax at all? I belive it only counts for 15-20% of total tax anyway, costs billions to collect which could be cut to very little.The average jos would spend the saing on things that have indirect tax on and the givernement gets the momey anyway and also stimulates the economy. Is any goverment bold enough?
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http://en.wikipedia.org/wiki/File:UK_taxes.svg add in employee's NI and it's nearly 1/3
VAT would have to double or trebble
Sounds like a non starter to me
http://en.wikipedia.org/wiki/File:UK_taxes.svg add in employee's NI and it's nearly 1/3
VAT would have to double or trebble
Sounds like a non starter to me
-- answer removed --
People already bleat about Rip-Off Britain because our prices include VAT and countries such as the USA advertise excluding VAT (they have a local purchase tax that varies state to state). So when they see a $500 computer in the States and it cost £600 here, they will buy abroad.
There would be a huge increase in smuggling and retail tourism, and British Traders would suffer.
There would be a huge increase in smuggling and retail tourism, and British Traders would suffer.
Some are expecting dire consequences if VAT goes up just 2.5% as is predicted...
// A business group set up by former Bank of England economists urged Mr Osborne to think again last night.
The Fathom consultancy said a rise (in VAT to 20%) would threaten consumer confidence by encouraging more saving, as happened in Japan in the 1990s.
It could also trigger an increase in inflation, the economists warned. //
// A business group set up by former Bank of England economists urged Mr Osborne to think again last night.
The Fathom consultancy said a rise (in VAT to 20%) would threaten consumer confidence by encouraging more saving, as happened in Japan in the 1990s.
It could also trigger an increase in inflation, the economists warned. //
Firstly I don't think you'd save much in department costs I think their budget was about £4 Billion or a bit over £100 a year for each of us.
You'd still have to have a significant department to properly manage tax collection however you do it.
The problem with putting it on indirect taxation is that there is no way of banding it to income.
So lets take a Nurse on about £13K they'd be better off by about what? £1,500 a year say £2,000 if you add in NI or £40 a week
It wouldn't take long for that to get swallowed up by a trebbling of VAT
Not only that but as we all know there is a huge problem of "cash jobs" in this country
So you'd be moving to a system that penalised the poorest disproportionately and was more susceptable to fraud
You'd still have to have a significant department to properly manage tax collection however you do it.
The problem with putting it on indirect taxation is that there is no way of banding it to income.
So lets take a Nurse on about £13K they'd be better off by about what? £1,500 a year say £2,000 if you add in NI or £40 a week
It wouldn't take long for that to get swallowed up by a trebbling of VAT
Not only that but as we all know there is a huge problem of "cash jobs" in this country
So you'd be moving to a system that penalised the poorest disproportionately and was more susceptable to fraud
If VAT is self collecting, why do tradespeople offer a discount for cash in hand? Once you let the money go into people's pockets, you have lost an element of control, so you take some away before they can hide it under the mattress.
If you significantly increase VAT, it hurts the lower paid proportionally more as the percentage of their income paid as tax increases.
Most modern countries have a VAT and PAYE system that is balanced between cost of collection, ease of enforcement and meeting social needs
If you significantly increase VAT, it hurts the lower paid proportionally more as the percentage of their income paid as tax increases.
Most modern countries have a VAT and PAYE system that is balanced between cost of collection, ease of enforcement and meeting social needs
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