So, Gordon Brown plans to cut VAT (sales tax) from 17.5% to 15%, to "stimulate the economy". So, every £1000 you spend in shops, you ought to save £25. However, the cost of implementing this (to the government and businesses) will be almost as much as the cut. Also, the cost of resetting the rate back to 17.5% in a few years is going to be high too. So, that's eliminated the cut's usefulness.
How will the government pay for the cut? By raising taxes far more, that's how! They will go back on their pledge to keep income taxes level and will make the top tax rate 45%. That should pay for it...
...so they're going to raise taxes more, for no reason.
- National Insurance will go up by an amount that works out to 0.5% of everyone's total income. Everyone. From people with no income to the rich to pensioners. That's £1000 out of a £20000 income.
- Oh, and duty on petrol, alcohol and tobacco will go up significantly too. That will negate the VAT rise to consumers too, since we can't avoid paying for petrol (and it's already more than double the price elsewhere) and alcohol consumption is likely to increase due to the recession.
- Thought that would pay for it yet? No - the government is also going to borrow more money than any UK government ever has, even during WWII. This will be paid for by even more 'future tax rises'.
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Thanks, Gordon. The plan you've set out will take more money from every demographic and also businesses. Just what we need during an economic crisis. Your bad leadership created the situation, and now you aren't even managing it right. All the public will see is the *shiny* VAT cut, and you'll even get more votes for it for appearing to be in control of the situation. I just hope I'm 18 by the time you call a general election.
