OT: Market Reaction to Qasi's Budget

[Joe]

50GBP in Harold Wilson's day.

[The Natural Philosopher]

Pound now above pre budget levels.

[JNugent]

Around 1966, the limit for a holiday was either £30 or £35 per capita (I don't know whether it applied to children as well).

I can't remember whether the Barclaycard had been launched by then, but it would have driven a coach and horses through that limit, of course. But then, it was just possible to get a Diners Club or Amex card (if you were rich enough).

[JNugent]

There isn't much (that's worth having) that doesn't carry VAT at 20%.

[Fredxx]

You have been denial of exactly the same facts before. However much you rather this isn't the case, I suggest you read up on the subject to become more enlightened.

Quite, there is only so much food you can eat.

[JNugent]

I thought it was £30 or £35.

Just shows how the memory can falter...

[Fredxx]

I take it from your reply you can't cite relevant evidence.

[Rod Speed]

He means as opposed to what they pay in income tax.

Poorly stated.

[zall]

No, and everything isn't, most obviously with cars.

And it isn't just about manufactured goods, a cut in the income tax will see plenty spend more on services too.

But do provide employment in Britain.

But it remains to be seen how long that lasts.

[JNugent]

Please spill the beans on what significant items don't carry VAT (if not other taxes and duties as well).

Exactly. Zero-rated goods can't form a large part of the consumption pattern of an affluent household. So VAT at 20% is likely to be a larger proportion of such a household's expenditure than it is of a poorer household's expenditure.

Where "poor" households lose out is possibly via the duty and tax on tobacco products.

[JNugent]

Assuming that you refer to the exchange control limit, I thought it was £35.

BB thought it was £100.

It was actually £50.

[JNugent]

"Poorer people"?

OK.

Given that the tax-free allowance is £12,500, there must be quite a few people who pay more in VAT and duties than they pay in income tax.

But it sounded as though the claim was that "poorer people" pay more VAT (even as a proportion of income) that the wicked rich. And unless the wicked rich stick all their money into mattresses, that isn't possible.

[Rod Speed]

That's bullshit with food and books.

[Rod Speed]

But you can certainly buy more expensive food like steak if you have more cash available.

[Rod Speed]

Yeah, that's what I meant about poorly stated. That isn't what he meant.

They do in fact save a lot higher percentage of their income.

The dregs of the economy have very little in the way of savings.

Fraid so.

[JNugent]

Food, books, newspapers, childrens' clothes.

That's more or less it.

Domestic energy: 5% VAT.

Everything else: 20% VAT (plus other taxes on some things).

[Fredxx]

Houses, land. Holidays abroad. Holiday homes abroad. Childcare costs. Do use your imagination.

Zero VAT food is not a significant expenditure for affluent or non-affluent households.

I have told you before with links otherwise. Are you suffering from dementia?

This may have been the link I provide you:

are many others that show the regressive nature of VAT. Be a plonker and argue the toss.

And drink I guess too. There is only so much you can drink.

[JNugent]

These are not low- or medium-order purchases.

And whether or not they carry VAT, they certainly carry other taxes, whether here or elsewhere. Flying out of a UK airport to anywhere worth going incurs a not-inconsiderable sum in APD too.

Why are childcare costs VAT-free? That would depend on the turnover of the business or individual providing that service. It is not VAT-free in principle.

And remembering that the subject here (see post by The Other John) was whether or not the "loss" in income tax would be partially compensated for by the VAT on extra expenditure, well... people don't decide to buy such things - especially property - out of a marginal 5% of income.

That's a bold statement. Many Grauniad BTL posters insist that too many households spend a large proportion of income on food.

You can't have that both ways at once and being rude and aggressive (a familiar approach for you) does not make you any more correct.

If a higher-income household isn't spending a large proportion of income on VAT-exempt items like foodstuffs - and if they are spending their income - they have to be buying or paying for more goods and services which carry VAT (and probably even more swingeing taxes and duties on top of that).

I wonder whether the author understands the meaning of "regressive" within economics.

Yes... but I have heard of households where a surprisingly large proportion is spent on alcohol.

[Fredxx]

Yes, you've finally hit the nail on the head. These are items that the more affluent with higher incomes might buy, and ones with lower incomes can't.

<snip>

Not all is zero VAT.

Maybe so, but when you have been shown articles before on the subject, you can only ask yourself why you don't recall these. It is either through dementia, or singing la la la to simple facts you'd rather weren't true. Your choice.

If you feel I am being rude and aggressive, well, if that is what it takes for you to absorb simple facts, then so be it. Hey, you may even remember next time the subject on VAT comes up.

Do you understand what it means? Do you understand that the article provides some evidence that households on a lower income pay a higher proportion of VAT.

So have I. Your point, or are you trying to reinforce my point after all.

[Rod Speed]

Wrong with holidays abroad.

But you are free to use the chunnel or ferrys.

But they can with plenty of other stuff.

But not necessarily on VAT FREE food.

He isn't doing that.

They rarely do, they mostly have much higher savings.

Not with savings.

Corse he does with tax.

And on VAT free illegal drugs in spades.