VAT to be cut by at least 2%!
- Thread starter Hen_Dawg
- Start date
Mmmm, I remain slightly dubious. Will this really kick-start the economy as they hope?
The cynic in me says this is a stunt ready for the run-up to the next GE in 2010/11. In come the Conservatives and have to hike taxes and ultimately get the blame from Joe Public. GE after that, Labour come back into power. Ugh.
The cynic in me says this is a stunt ready for the run-up to the next GE in 2010/11. In come the Conservatives and have to hike taxes and ultimately get the blame from Joe Public. GE after that, Labour come back into power. Ugh.
I take it you're a contractor on the fixed rate scheme then?
Would have thought that if they did reduce the percentage to 15% they would reduce the fixed rate liability as well.
If they don't they will likely get loads of small businesses changing their fixed rate status within a short period, which would no doubt be a major headache for the government.
Anyway, I think this will backfire on the government for a number of reasons.
- They won't be able to implement this immediately as there are many, many computer systems that calculate VAT at 17.5% percent, which will need to be changed.
- This in turn means that consumers will hold off buying expensive items until the new VAT rate comes into effect, exacerbating the downturn.
- Shops aren't going to roundly reduce the price of every item by 2.2%, especially for smaller ticket items, so the tax reduction won't make all the much difference anyway.
Not directly to consumers no, but if it boosts retailer profits then that money is still getting back into the economy.
Soldato
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Actually the survival of the current monetary\banking system relies on this very concept.
less debt = less money in the system
The larger the debt, the more money the banks can create.
yup, money is debt
something I didn't fully understand until I saw that youtube video recently
So, they need to get people spending money again, so they drop VAT, the effects of which won't be passed on by retailers, they'll just take the extra profit, so what incentive is there to actually spend?
Why not ignore VAT, but work more on increasing the disposable income of everybody, eg increasing the tax free allowance, or lowering the 20% rate to 15% or something, a measure that affects everyone giving them all more money to plough back into the economy.
But even that isn't going to work, the average person is in so much debt, and with banks becoming harsher on bad debts there is nothing brown/darling can do, they've had the glory days of one hell of a boom, and all they've managed to do in that time is increase national debt and sell off the gold reserves so now we're in a situation where we have nothing to fall back on, except increasing national debt yet further, we're screwed thanks to 11 years under labour incompetence, so yeah lets vote them in for another 5 years ¬_¬
Why not ignore VAT, but work more on increasing the disposable income of everybody, eg increasing the tax free allowance, or lowering the 20% rate to 15% or something, a measure that affects everyone giving them all more money to plough back into the economy.
But even that isn't going to work, the average person is in so much debt, and with banks becoming harsher on bad debts there is nothing brown/darling can do, they've had the glory days of one hell of a boom, and all they've managed to do in that time is increase national debt and sell off the gold reserves so now we're in a situation where we have nothing to fall back on, except increasing national debt yet further, we're screwed thanks to 11 years under labour incompetence, so yeah lets vote them in for another 5 years ¬_¬
Are you George Osbourne?
Maybe I will be one day.
Suspended
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This TBH. This reduction will have ZERO effect as far as stimulating the economy goes...
which youtube video?
Balls, the only reason that would happen would be because of labour's outrageous spending commitments. It's just a shame they've had three terms to screw things up so badly that getting any form of balanced budget back is going to be painful...
I'd support the move strongly if it was affordable (ie the government wasn't throwing money hand over fist at anything that moves).
Less taxation, less government spending and less government interference is what I support, not less taxation, more government spending, lots of borrowing and massively increased government interference.
Regardless of how we got here, we are in recession and tax cuts are the one way a government can stimulate spending and growth to promote recovery. Interest rates are the other way this can be achieved and they have already been slashed, probably with further cuts in the pipeline.
What is everyone moaning about?
If they did nothing people would be moaning about that.
We are going through a once in a century worldwide financial crisis, and such times call for a strong response from government.
What is everyone moaning about?
If they did nothing people would be moaning about that.
We are going through a once in a century worldwide financial crisis, and such times call for a strong response from government.
Associate
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Personally I have been waiting for this mess for some time. We have become greedy and unwilling to wait for anything as a nation. Households now depend on two incomes as we chase ever inflated house prices and the level of personal savings have shrunk to nothing while we pour more and more debt on ourselves. I fail to see how we can maintain this and like all change, we will resist until there is no choice but to.
I am afraid I am keeping my fingers crossed for a long and hard "down turn". We may all suffer, even those of us who have been more financially responsible but we did it to ourselves. Sorry for the rant.
I am afraid I am keeping my fingers crossed for a long and hard "down turn". We may all suffer, even those of us who have been more financially responsible but we did it to ourselves. Sorry for the rant.