Online sales tax considered in bid to save the high street

[ttaskmaster]

Where is it in the manifesto?

In addition to the explanation already given above, that is to say, they never said they wouldn't... Why does it have to be in the manifesto anyway? Everyone knows not to trust these people, yet they still get voted in. Why are you then so surprised and upset when they do what you feared they would?

Just because people voted in a government doesn't mean that they can then do anything they like without criticism.

Oh, I'm sure they could make it illegal to criticise them. I understand Europe already did something like that, anyway.

Because by avoiding tax they can offer reduced prices which increases sales and revenue and profit.

Why would they reduce prices when those prices already cover the tax that they don't need to pay? Surely the better option would be to dodge the tax, keep the prices and make even more profits, no?
If you want to increase sales, corner your market and then overcharge - It works great for iPhones...

 

[Energize]

In addition to the explanation already given above, that is to say, they never said they wouldn't... Why does it have to be in the manifesto anyway? Everyone knows not to trust these people, yet they still get voted in. Why are you then so surprised and upset when they do what you feared they would?

I never said I was surprised, you said people voted for the tax which was blatantly false, there were no suggestions of such a tax during the election campaign.

Why would they reduce prices when those prices already cover the tax that they don't need to pay? Surely the better option would be to dodge the tax, keep the prices and make even more profits, no?
If you want to increase sales, corner your market and then overcharge - It works great for iPhones...

The economic term for it is price elasticity. A small reduction in price can cause a large increase in sales. Avoiding corporation tax means companies don't have to incorporate it into their prices which means more sales and ultimately more profit.

Saying that, the tax burden does not just lay with the consumer, the burden also falls on employees as it affects the salaries offered. Ultimately people pay taxes, corporations are just a piece of paper. It makes for a great soundbite though during an election campaign to say that you're going to make companies "pay their fair share".

Economic protectionism is a cancer, if businesses are unsustainable they need to go.

 

[ttaskmaster]

I never said I was surprised,

You're clearly upset though... and you must be surprised else you'd have seen this coming and spoken against it in advance.

you said people voted for the tax which was blatantly false

I said people voted for the "authoritarian government". They cannot vote for or against taxes directly... only for the government that decides on tax. And since this is the government the majority wanted, along with with all the legal freedoms to invent new taxes that said government is now considering making use of, they must be happy with what their govermnent is doing.

It's kinda like Star Citizen - People moan about their pledged 'investment' and all that, but those backers merely gave money to a company so that the company could develop the game it wanted, however it wanted, without being obligated to the pressures of a purse-holding publisher. That's all that was on the table. No promises to actually deliver anything, much less to what the backers seem to feel entitled. Same here - People voted, knowing exactly what the Tory promises were, and that anything else not specifically mentioned was for the Tories to decide.

there were no suggestions of such a tax during the election campaign.

There were no such suggestions of there not being one, either.
The only taxes specifically mentioned, IIRC, were VAT, Income Tax and NI contributions. Everything else is fair game by default. If they really wanted to tax you every time you pee, I'm sure they could, but they're allowed to come up with stuff like that.

If you don't like it, wait until the next election and then vote for someone else.

Avoiding corporation tax means companies don't have to incorporate it into their prices which means more sales and ultimately more profit.

Avoiding corporation tax while keeping prices high works just fine, though: https://fortune.com/2018/01/18/apple-bonuses-money-us-350-billion-taxes-trump/
Besides, they can still do all that and merely increase prices in another captive area too, making it look like prices have dropped but just moving the cost of that to another element of the business, ultimately increasing profits even more.

 

[Energize]

I don't know why you think I'm upset, this tax will never happen realistically, nor will it save the high street.

It's the government a minority of the population voted for and if such a significant tax were being considered it should have been included in the manifesto.

That strategy only works for certain goods, it doesn't work for Amazon for examples which specialises in cheap products in general. With things like perfumes for example price elasticity tends to be inverse which means more people buy the product the more expensive it is. In any case, whatever Apple is doing has no bearing on the effect corporation tax has on most companies.

 

[Steeps]

This tax has already started, our Amazon listing fees are going up 2%, if we used Amazon fulfilment this would also increase and same for Amazon shipping. We've tried going down the High Street route with all of our products and they either don't see it as a fast enough moving line to stock or they want 40% markup plus shelf space rental. Training of staff is non-existent and it's very hard to market a different brand at a different price point without having the data to back up the claims, which you can't fit on a box. For small businesses the likes of Amazon/eBay are an essential evil necessity because the High Street won't take a chance on new and innovative.

 

[ttaskmaster]

I don't know why you think I'm upset

"Yay, yet another tax from our authoritarian government, what a surprise."
So you're genuinely enthusiastic and not being, in the slightest bit, sarcastic, then?

this tax will never happen realistically, nor will it save the high street.

Happen - Fairly likely.
Save - Probably not, but the Gov will have loads more tax money by the time the high street falls completely, so what do they care?

It's the government a minority of the population voted for

It's the government that the most people voted for. Yes, it was less than 50%, but the others all wanted one of several other options. Had they all come together on the one opposing option, they'd have won... but they didn't want that.

if such a significant tax were being considered it should have been included in the manifesto.

If people were going to be voting for a party that controls their lives, they should have factored in how that party would cope in the face of an unprecedented global pandemic, then... DUUHHHHHH!!
This situation did not exist to this dire an extent at the time the first manifesto was published.
Should tehy have hopped into a DeLorean and gone back to change their manifesto, do you think?

That strategy only works for certain goods, it doesn't work for Amazon for examples which specialises in cheap products in general.

They use similar tactics, just employed in different ways. Prices seem to drop, discounts seem to be offered, but they still make many, many billions from many, many people.
Part of that is their pricing algorithm - A couple of things I wishlisted recently went from £7 to £35, then up and down all over the place between those values. This is just on 'sold by Amazon' items, too. The day after I finally got them, at their original price, they jumped to £26.
Generally I find Amazon more expensive that most other places.

In any case, whatever Apple is doing has no bearing on the effect corporation tax has on most companies.

Depends whether the company has a secure corner of the market.
My company does it, mainly because we have a monopoly on our services.

 

[413x]

Happen - Fairly likely.
Save - Probably not, but the Gov will have loads more tax money by the time the high street falls completely, so what do they care?

This is my view

It will happen, as need to plug the shortfall in tax revenue.

The acceleration of the death of the high street means acceleration of reduced tax income.

Someone needs to at least attempt to correct it.

 

[FoxEye]

The high street is already dead, pretty much. At this point they're just making its corpse twitch a bit, but it isn't fooling anyone!

 

[Jambo]

This tax has already started, our Amazon listing fees are going up 2%, if we used Amazon fulfilment this would also increase and same for Amazon shipping.

That is the new Digital Services Tax. Unfortunately what is being proposed is an additional 2% online sales tax.

 

[Diagro]

My towns full of charity shops.
Very limited clothes shops, one of which have mens clothes.
A stationery shop.
4 phone shops
Whsmith
Tool shop
And pubs.

None of the shops have nearly anything I want, and the times I do go to a shop expecting to be able to buy a typically stocked item. Its out of stock. "oh, come back in 2 days sir" yea no thanks. I'll order it on amazon and have it the same day. Kthxbye

 

[Rotty]

much needed tax revenue that you will hardly notice, no real issue IMO

 

[Energize]

If people were going to be voting for a party that controls their lives, they should have factored in how that party would cope in the face of an unprecedented global pandemic, then... DUUHHHHHH!!
This situation did not exist to this dire an extent at the time the first manifesto was published.
Should tehy have hopped into a DeLorean and gone back to change their manifesto, do you think?

If you honestly believe this is being done to save the high street I don't know what to say...

They use similar tactics, just employed in different ways. Prices seem to drop, discounts seem to be offered, but they still make many, many billions from many, many people.
Part of that is their pricing algorithm - A couple of things I wishlisted recently went from £7 to £35, then up and down all over the place between those values. This is just on 'sold by Amazon' items, too. The day after I finally got them, at their original price, they jumped to £26.
Generally I find Amazon more expensive that most other places.

I was more referring to the "keeping prices high while avoiding corporation tax", which upon re-reading the article was actually tax evasion via lobbying and thus totally irrelevant to this discussion.

You are basically agreeing with me here, reducing prices on some products and raising it on others with a lower price elasticity passes the cost of corporation tax onto the consumer, thus it is a tax on the consumer and employees not the corporation/shareholders.

 

[Combat squirrel]

High streets dead.

Our society isn't what we humans naturally want at this scale, we evolved for smaller social groups. Extrapolate that out and it's little wonder everyone avoids high street shopping, a joyless hassle filled experience, expensive, time consuming.......when I online shop, I know what I want and I order it, takes 5 mins, get on with the rest of my day.......humans want their humanity back, not spend all their time serving capatilism.

Add to that a pandemic and it's accelerated the end, I don't even food shop now, hassle, noisy, stressful, rather avoid and get it delivered or I enjoy visiting small tesco express shops because it's quicker and easier, however they will go as the high street dies.....or perhaps those and news agents will survive as the only local store for quick things.

 

[StriderX]

High streets dead.

Our society isn't what we humans naturally want at this scale, we evolved for smaller social groups. Extrapolate that out and it's little wonder everyone avoids high street shopping, a joyless hassle filled experience, expensive, time consuming.......when I online shop, I know what I want and I order it, takes 5 mins, get on with the rest of my day.......humans want their humanity back, not spend all their time serving capatilism.

Add to that a pandemic and it's accelerated the end, I don't even food shop now, hassle, noisy, stressful, rather avoid and get it delivered or I enjoy visiting small tesco express shops because it's quicker and easier, however they will go as the high street dies.....or perhaps those and news agents will survive as the only local store for quick things.

It's not even capitalism, it's just vested interests trying to prevent their own demise by making it worse for everyone.

 

[V F]

That is the new Digital Services Tax. Unfortunately what is being proposed is an additional 2% online sales tax.

Just what we need, taxed until we squeal then tax us even more.

 

[ttaskmaster]

If you honestly believe this is being done to save the high street I don't know what to say...

If you honestly believe that's what I was saying, I do know what to say, although it would likely get me banned.
But whatever I believe (actually mentioned above) is not a factor in the point - It's that people did vote this government into power, and they are allowed to create new taxes if they feel like it. People voted with this knowledge, so they can't get their knickers in a twist when it actually happens.

I was more referring to the "keeping prices high while avoiding corporation tax", which upon re-reading the article was actually tax evasion via lobbying and thus totally irrelevant to this discussion.

It's all forms of 'not paying tax' and thus maximising profits. Anything gleaned from fussing around with prices or getting the customer to pay for their extra tax (which I presume they also won't pay) is just even more profit.

humans want their humanity back, not spend all their time serving capatilism.

Funny way of going about getting it, though... enabling mega-capitalist corporations like Amazon.
Pretty soon most of them will be worker-drones, serving capitalism in Amazon warehouses anyway, as so many of their other jobs will have gone.

 

[Energize]

It's all forms of 'not paying tax' and thus maximising profits. Anything gleaned from fussing around with prices or getting the customer to pay for their extra tax (which I presume they also won't pay) is just even more profit.

Tax evasion and avoidance are two completely different things, you cannot talk about them in the same context and expect to be taken seriously.

Anyway it's all academic, as any economist will tell you, the net effect of a sales tax is a tax on the poor.

 

[Rroff]

News over the last couple of days on the high street in the town I recently moved from is grim - Beales has gone, Laura Ashley and several similar stores have announced they are closing, Game is moving into a concessions in an edge of town Sports Direct (we used to have 3x Game stores within 200m or so of each other) several restaurants have announced they are closing either due to the current situation and/or due to disputes with the council. A big name gym is closing and it doesn't look like the high street Argos is going to reopen.

It is pretty much Armageddon down there.

 

[413x]

News over the last couple of days on the high street in the town I recently moved from is grim - Beales has gone, Laura Ashley and several similar stores have announced they are closing, Game is moving into a concessions in an edge of town Sports Direct (we used to have 3x Game stores within 200m or so of each other) several restaurants have announced they are closing either due to the current situation and/or due to disputes with the council. A big name gym is closing and it doesn't look like the high street Argos is going to reopen.

It is pretty much Armageddon down there.

Have to wonder if we have taken a big step towards decentralisation. Or if things will centralise again.

The Internet truly is the catalyst of all these effects on our lives. Amazing really.

Can't help but feel property prices in inner city will take a beating. Especially in smaller towns where the jobs are going to fall away most

 

[ttaskmaster]

Tax evasion and avoidance are two completely different things, you cannot talk about them in the same context and expect to be taken seriously.

In this instance I can (hence doing so) because the only difference between evasion and avoidance is the legality of each.
As mentioned, the government could make it illegal to pass the cost of the new tax onto the customer, thus making sure the company is the one paying it. Other countries with sales tax have done this. The only question is whether, and how, the government would go about enforcing it.... and given how llax they've been about enforcing regular tax, I won't be holding out much hope.

Anyway it's all academic, as any economist will tell you, the net effect of a sales tax is a tax on the poor.

Not necessarily - As people have been so keen to point out in other threads (sugar, tobacco, etc), taxation and price increases control the market. This means that, if this tax was done right, poor people would eventually go back to the high street.