Why is tax so high ?

Jono8 said:
Yes its hilarious how all our waste gets collected and taken away for us on a weekly basis

:confused:
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Fort night here, we have 5 people living in this house, only 1 green bin per house allowed.

We had to take up stupid recycling, now we have a green for landfill, brown for garden waste, blue for tins/glass, red for cardboard/plastic AND 2 food bins, one for fresh/raw waste and one for cooked.

The tax is not "bad" in this country, it is worse in other places, however I do miss the very short time where we had 15% tax....
 
The problem with lowering VAT is the cut has to be substatial, otherwise many retailers won't pass it on to customers. A large reduction in VAT would make an immediate balck hole in our already poor finances. I just can't see it being viable.
 
peter_hutson said:
The problem with lowering VAT is the cut has to be substatial, otherwise many retailers won't pass it on to customers. A large reduction in VAT would make an immediate balck hole in our already poor finances. I just can't see it being viable.
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i noticed hardly any difference from a retail perspective but i was purchasing my house when it was 15% VAT and that saved me a nice little amount when it came to fee's.
 
Freakbro said:
Except it is the public who 'net' pay VAT, not the companies.
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What difference does that make? Companies that charge VAT pitch their products at a price level they think the market can carrry, including the VAT. Do you really think the likes of Apple would cut 20% of the cost of their products if VAT was removed?
 
cm1179 said:
i noticed hardly any difference from a retail perspective but i was purchasing my house when it was 15% VAT and that saved me a nice little amount when it came to fee's.
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I agree. I was fortuante enough to be building a house (VAT applicable due to the presence of three walls!) during the 15% VAT period. But for the vast majority of people I don't think it made any difference.
 
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peter_hutson said:
What difference does that make? Companies that charge VAT pitch their products at a price level they think the market can carrry, including the VAT. Do you really think the likes of Apple would cut 20% of the cost of their products if VAT was removed?
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This is why lowering it to 15% didn't work, companies just pocketed the extra profit. Plus it only work if you regularly buy vatable products.
 
peter_hutson said:
What difference does that make? Companies that charge VAT pitch their products at a price level they think the market can carrry, including the VAT. Do you really think the likes of Apple would cut 20% of the cost of their products if VAT was removed?
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Well, you said VAT was taking a cut of the companies revenue, it's not, when you see the revenue of a company expressed as 'X' turnover, that is Net of VAT.

Companies price their products to reach a profit % without the inclusion of a sales tax.
 
The tax is higher than most people realise... you've already paid 23% or 40% tax on the money earned before spending it. So if you're a 40% tax payer then it's:

£500
of which you already paid £200 in tax as PAYE.
then another £100 VAT

So for a £500 item you may have paid £300 in tax if an upper rate tax payer. That doesn't even include NI.
 
I doubt I would lower my prices if VAT was reduced.

I had to lay off 18 drivers last year due to a lost contract. I've now built that back up and took on my 13th driver last night.

I'm more inclined to keep the extra profits now
 
A 2.5 point drop in vat makes very little difference to the consumer. The effect on prices equates to -2% which isnt going to induce a consumer driven recovery.

It would be better to raise income tax thresholds to promote more spending in the highstreet. The personal allowance is creeping closer to the £10k level but the higher rate threshold needs to be lifted as well to compensate for increasing wages. The people with the most spending power are the people whom such a change will benefit, they will spend more money and the economy will feel the benefit.
 
gillywibble said:
Surely if they lowered VAT this would boost sales thus improving the economy?
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Hades said:
The tax is higher than most people realise... you've already paid 23% or 40% tax on the money earned before spending it. So if you're a 40% tax payer then it's:

£500
of which you already paid £200 in tax as PAYE.
then another £100 VAT

So for a £500 item you may have paid £300 in tax if an upper rate tax payer. That doesn't even include NI.
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That reads like for every £500 you earn as a 40% tax payer you pay £200 in tax. Thats NOT correct
 
Freakbro said:
Well, you said VAT was taking a cut of the companies revenue, it's not, revenue of a company is Net of VAT.
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I'll rephrase then, VAT limits the price a company can charge for a product, as the consumer will only pay a certain amount. VAT therefore constrains to a degree the potential profit, and directs some of that difference to the State. Very inefficient I agree. But it seems more effective that Corp Tax,



Freakbro said:
Companies price their products to reach a profit % without the inclusion of a sales tax.
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I don't agree, companies may do the above calculation, but they then adjust to what they think the market will carry. If the market has shown people will may £1000 for a set laptop INC VAT. The reduction of VAT may result is a drop intitally, but prices are likely to creap back up.
 
It would be interesting to calcuate how much you actually pay in tax through a year and convert that to a percentage. For higher tax earners, I really would not be surprised if it breached 50%.
 
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