Labour could have raised a million people out of poverty, and probably more by reducing the current disincentives of work, by changing the personal allowance and this would have cost less than the VAT change. So I wonder why they chose a tax cut that principally helps retailers rather than poor people? It would, of course, have absolutely nothing to do with the fact that the Labour Party is currently being propped up by major retailer Lord Sainsbury.
And I have to say, it gave me pause, although I don't think that Lord Sainsbury is still actively involved in (what was) the family business. He still profits hugely from it, so I suppose it could have been a motive.
But I did wonder, why VAT? I mean, it will probably help old Saino claw back some or all of his £2 million donation to Labour but I think it's probably a bit more pernicious than that: Labour's cutting VAT was an excuse to push up the price of petrol, fags and beer which will pay them a lot more in the long run.
This was not about the government doing something to help "struggling families", this was about another objective entirely: this was just another piece of socialist social engineering. VAT has been cut on some consumer items (that we're not going to buy in a fucking recession anyway), but not by enough to actually make diddly difference. However, the usual suspects (booze, fags and car juice) got heavily punished. And since people are going to be hoarding their pennies and so used to living under the cosh anyway, I can see lots of nanny-state fuckmongering being slipped in under the guise of trying to "fiscally stimulate" us.
This wasn't a fiscal stimulus in any way, shape or form.
This was just a tax grab in a frock and an assessment of how compliant we are. If we just lie there and take it, then I personally would not be astounded to see it go all the way to something like maybe an EU bailout, provided we kneel and bow our collective heads to and wrap our lips firmly around the EU's cock.
5 comments:
Why VAT?
Simple. The Goverment is in such a huge hole that they simple had to be seen to be doing something... anything! They also needed political cover for the massive borrowing required just to keep Whitehall's lights shining.
So, rather than cut income tax or halve the Council Tax (things that would have put real money into peoples hands) they choose VAT. A cut that will NOT end up in the punters pockets and will, in all likelihood, not even cost the Government all that much.
Meanwhile, having given (ermmm nothing) with one hand, they're free to take with the other. The reasoning being that the Plebs wouldn't squeal too much about the increased taxes and borrowing because afterall they got a hand-out too?
At the risk of hammering the point too much... its a Shell Game. The Government wins everytime.
Obo, you are making the same mistake as most people and falling for The Big Fat Lie that VAT is a tax on 'consumption' (which is a sort of Nanny Knows Best type tax).
Bollocks.
End prices are set by the market, ergo in economic terms, VAT is a tax on the turnover of VAT-registered businesses supplying to consumers. It is borne by the business. If you strip out banks and North Sea oil companies, the rest of UK plc pays four times as much VAT as it does corporation tax.
And because VAT has to be paid whether or not a business makes profits, VAT sends marginal companies to the wall (unlike corporation tax). In a recession, it is better to cut the tax that is most likely to tip marginal businesses into bankruptcy (with corresponding loss of jobs etc) than fanny about with corporation tax, or even income tax.
Ergo, Nulab have for once - probably inadvertently - done The Right Thing.
Re Sainsbury's, if you are right, then that's Sainsbury's second pound of flesh - see item 2 here.
They really know how to squeeze value out of that £2m "loan".
I know all about VAT sending small businesses to the wall ... :o)
This was positioned as a "fiscal stimulus" and something to help "hard-working families" through the "global credit crunch", not as something to save small businesses from going to the wall.
I have to say that as a consumer, I felt that this tax cut was not going to change diddly, and I'm sure you'll agree that from a consumer confidence point of view, it's done nothings.
Any tax cut is a good thing, and I am not saying it shouldn't have been done, I'm just saying that like so many ZaNu Labia cons, it doesn't have the officially stated consequences.
Obo, it is quite possible that they are so stupid that they have gone round the clock and done The Right Thing for The Wrong Reasons.
Of course the VAT cut will do nothing for 'consumers' (I do wonder whether they are stupid enough to believe this themselves), but it will do a lot for 'businesses' and hence 'employees'.
And seeing as business owners and employees are also consumers, they get the right end result. Which is what matters.
I hate to sound like I'm approving of Darling and his PBR in any way but it might have been seen as the best tool to use against the deflationary threat because the price changes, if they are passed on, can be visibly seen at the point of sale?
However, I think it will do the grand sum of fuck all and a nice raise in the personal allowance would have been much better. But that's against the mentality of the socialists.
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