Quote Originally Posted by WanChaiMiller View Post
Agree on vat.

Note our vat threshfold was raised by this Gov from 17.5% to the top band of 20%.

Interesting therefore that the Tory supporters on here are up in arms about a suggested hike in Corp Tax which has less impact than the rise in VAT - except....CT effect their precious share divvis and vat hits the poor.
By threshold, I assume you mean rate?

The Labour government reduced the level of VAT in the aftermath of the 2008 crash with the aim of stimulating the demand side of the economy and maintaining business confidence. That demonstrates that Labour at the time had an understanding of the stimulating effect of tax cuts, which has now been lost. It was a bold move and, I think, a sensible one, but it could not be a long term policy, given that high levels of consumer debt was one of the issues facing the economy at the time (and now).

It was necessary to increase VAT to seek to maintain public services whilst reducing the budget deficit. I will take it as read that you consider both to be desirable outcomes?.

Does VAT hit the poor? It is a consumption tax and so hits those who do the most consuming...

Dividends are essential to keep pension funds growing. You may have noticed that some company schemes have been in trouble. To a significant degree that is down to lower dividend levels in the aftermath of 2008. With that being the case 'divis' are precious to large swathes of the population.