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[Foxin_Mad]

5 minutes ago, Buce said:

 

So, a tax on the poor?

No, because you can not as far as I am aware avoid paying VAT at point of sale. Its a fair and equal tax, those who spend more on vatable services will pay more. Most essentials have no VAT, or lower VAT so the 'poor' thing is somewhat a misnomer.

 

You could try and claim it back through a dodgy business I suppose. But HMRC are pretty good at detect VAT fraud. 

 

For personal purchases as a rich person you pay VAT on meals out, gadgets or whatever. They can not claim it back easily. 

 

For income tax you can offshore your accounts, or pay an  account to move your money around, convert it into 'loans', it is stupid but too easy for them to do. If they claim they don't earn a certain a mount they never pay the tax.

 

 

Edited 10 June 2019 by Foxin_Mad

[Buce]

3 minutes ago, Foxin_Mad said:

No, because you can not as far as I am aware avoid paying VAT at point of sale. Its a fair and equal tax, those who spend more on vatable services will pay more. Most essentials have no VAT, or lower VAT so the 'poor' thing is somewhat a misnomer.

 

You could try and claim it back through a dodgy business I suppose. But HMRC are pretty good at detect VAT fraud. 

 

For personal purchases as a rich person you pay VAT on meals out, gadgets or whatever. They can not claim it back easily. 

 

For income tax you can offshore your accounts, or pay an  account to move your money around, convert it into 'loans', it is stupid but too easy for them to do. If they claim they don't earn a certain a mount they never pay the tax.

 

 

 

Surely it's a 'poor tax' if the poor are paying tax twice on the same pound but the rich are only paying tax on money they spend?

[LiberalFox]

I'm not sure I understand the logic on why VAT is paying tax "twice".

[Innovindil]

1 minute ago, Buce said:

 

Surely it's a 'poor tax' if the poor are paying tax twice on the same pound but the rich are only paying tax on money they spend?

The argument for it is rich people buy more shit that has vat on it than the poor. So it's a rich tax. 

 

I'm 100% with you though, I pay enough in taxes already without paying tax on the things I buy too. I understand it for smoking and drinking, but for most other things, naaaah. 

[Innovindil]

2 minutes ago, LiberalFox said:

I'm not sure I understand the logic on why VAT is paying tax "twice".

Because people get taxed on their wages and then get taxed when they spend those wages? Not sure what's confusing honestly. 

Edited 10 June 2019 by Innovindil

[Kopfkino]

21 minutes ago, Buce said:

 

I'm not an economist, so I can't give an opinion on that, but I object in principle to a tax that taxes money that has already been taxed once.

 

As a matter of interest, do other countries have VAT?

Yes the vast majority. In fact, EU countries have to. Cos its a good tax.

[Foxin_Mad]

8 minutes ago, Buce said:

 

Surely it's a 'poor tax' if the poor are paying tax twice on the same pound but the rich are only paying tax on money they spend?

Maybe we should look at scrapping income tax as it is impossible to collect reliably in the current system, of course there are many rich who do pay the correct amount I am sure. 

 

Most essential items are Zero rated, household energy is a reduced rate 5%, Charity shop items no VAT, fresh ingredients no VAT. The only bone of contention for me is VAT on petrol. 

 

I would think the people paying the most VAT would be those consuming the most? 

Edited 10 June 2019 by Foxin_Mad

[Alf Bentley]

16 minutes ago, Buce said:

 

I'm not an economist, so I can't give an opinion on that, but I object in principle to a tax that taxes money that has already been taxed once.

 

As a matter of interest, do other countries have VAT?

 

As @Foxin_Mad said, most if not all of Europe does - though the rates and goods/services they're applied to vary from nation to nation. Some have a much more complex array of different VAT rates.

The EU sets certain limits, I think - VAT rates have to be between particular rates, though I'm not sure of details.

 

The USA has a lot of sales taxes instead, I think (plus lower tax & lower public spending generally). A lot of those sales taxes vary from one state to another, I think.

 

Commentators seem to be assuming that a sales tax is what Gove wants to use to replace VAT.

Presumably that would still involve the "double taxation" of personal income/spending that you object to - though he plans to levy his tax at a lower level (doubtless cutting public spending to fund it).

He's talking it up as an economic stimulus. There might be some logic to a sales tax doing that at the level of manufacturers & wholesalers who'd no longer be paying, reclaiming or collecting such tax, I presume.

But that wouldn't necessarily ease the burden on retailers or other traders serving the end customer. Might ease red tape in the long-term, but introducing a new system would probably increase the hassle in the short-term.

 

VAT is generally seen as a regressive tax: if you earn £20k and buy a TV, you pay a much higher proportion of your income than if you buy that same TV and earn £200k.

On the other hand, it gives the punter more freedom of choice - to spend or not to spend. Collecting the same amount of revenue via income tax would be more proportional, but gives less choice to punters (e.g. if they want to save cash, not spend).

[LiberalFox]

The issue with sales tax alone is it's not a progressive tax.

[Buce]

8 minutes ago, Foxin_Mad said:

Maybe we should look at scrapping income tax as it is impossible to collect reliably in the current system, of course there are many rich who do pay the correct amount I am sure. 

 

Most essential items are Zero rated, household energy is a reduced rate 5%, Charity shop items no VAT, fresh ingredients no VAT. The only bone of contention for me is VAT on petrol. 

 

I would think the people paying the most VAT would be those consuming the most? 

 

I dunno, it just seems unfair, to me.

 

I've just had to pay VAT on goods I imported from the US, on top of import duty, and all paid for with money I paid Income Tax on.

Edited 10 June 2019 by Buce

[Strokes]

2 minutes ago, Buce said:

 

I dunno, it just seems unfair, to me.

 

I've just had to pay VAT on goods I imported from the US, on top of import duty, and all paid for with money I paid Income Tax on.

More interestingly, what did you buy?

[Foxin_Mad]

2 minutes ago, Alf Bentley said:

 

VAT is generally seen as a regressive tax: if you earn £20k and buy a TV, you pay a much higher proportion of your income than if you buy that same TV and earn £200k.

On the other hand, it gives the punter more freedom of choice - to spend or not to spend. Collecting the same amount of revenue via income tax would be more proportional, but gives less choice to punters (e.g. if they want to save cash, not spend).

I'm not so sure on that. If you earn 200k you would most likely buy a bigger/better TV thus spending more on VAT. The person on 20k 'could' buy a TV from a Charity or 2nd hand that wouldn't be subject to VAT, you would have to question if they are buying a TV the same as a person earning 200k whether it is within their means. 

 

Income Tax is not collected reliably, there are so many who can afford to pay accountants to reduce/remove their liability. I know someone who does this, I reported them to HMRC they can not do anything as it is 'legal'. 

 

Rich people would I suspect pay considerably more VAT for good/services. 

[Buce]

1 minute ago, Strokes said:

More interestingly, what did you buy?

 

A tent and a sleeping bag.

[Foxin_Mad]

5 minutes ago, Buce said:

 

I dunno, it seems unfair, to me.

 

I've just had to pay VAT on goods I imported from the US, on top of import duty, and all paid for with money I paid Income Tax on.

Its not perfect. I also don't think Income Tax is fair. The way it is collected is not fair.

 

Accountants are readily able to come up with legal schemes to help those with enough money avoid paying their due amounts, this is a particular problem higher up the chain. PAYE works only for those lower down the chain. 

[Kopfkino]

1 minute ago, Foxin_Mad said:

I'm not so sure on that. If you earn 200k you would most likely buy a bigger/better TV thus spending more on VAT. The person on 20k 'could' buy a TV from a Charity or 2nd hand that wouldn't be subject to VAT, you would have to question if they are buying a TV the same as a person earning 200k whether it is within their means. 

 

Income Tax is not collected reliably, there are so many who can afford to pay accountants to reduce/remove their liability. I know someone who does this, I reported them to HMRC they can not do anything as it is 'legal'. 

 

Rich people would I suspect pay considerably more VAT for good/services. 

 

Well it is true that it is somewhat regressive when looking at income. But on expenditure it isn't. And part of that boils down to the fact that someone earning 200k isn't spending a huge chunk of their income, which isn't a problem with VAT itself, it's a problem with not taxing wealth. 

 

The UK has done a half decent job of making it 'fairer' but really the question needs to be answered, why is regressive bad rather than just assuming regressive is bad. That VAT is an economically optimal tax could be argued offsets some of the regressive.

[Strokes]

3 minutes ago, Buce said:

 

A tent and a sleeping bag.

Was there something unique about it that made you buy from the states?

Genuinely intrigued, not bating btw.

[Alf Bentley]

13 minutes ago, Foxin_Mad said:

I'm not so sure on that. If you earn 200k you would most likely buy a bigger/better TV thus spending more on VAT. The person on 20k 'could' buy a TV from a Charity or 2nd hand that wouldn't be subject to VAT, you would have to question if they are buying a TV the same as a person earning 200k whether it is within their means. 

 

Income Tax is not collected reliably, there are so many who can afford to pay accountants to reduce/remove their liability. I know someone who does this, I reported them to HMRC they can not do anything as it is 'legal'. 

 

Rich people would I suspect pay considerably more VAT for good/services. 

 

I don't doubt that people with higher incomes pay more VAT as an absolute figure, for the reasons you've stated.

But not as a proportion of their disposable income. If someone on £20k pays £200 for a TV, that makes a sizeable dent as most of their income will be going on essentials like housing, food, clothing etc.

Even assuming that someone on £200k pays £2000 for a much better TV, that's likely to make a much smaller dent in their disposable income (as well as providing higher value - including for resale).

 

If that same tax is raised through income tax, someone on £200k will be paying proportionally much higher.....unless they avoid/evade income tax, as you've described.

But surely the answer to income tax avoidance/evasion is to make more serious efforts to clamp down on loopholes etc? Not an easy task, granted, but not one most govts are in a hurry to do, given the power and influence of some tax avoiders - some of whom are party donors....

 

Edited 10 June 2019 by Alf Bentley

[Alf Bentley]

With Gove's proposal, I wonder if it's a "dead cat" tactic - chuck out a dramatic, sketchy idea to make a big cut in tax, so as to distract attention from his cocaine use/hypocrisy?

 

Not a very successful "dead cat" move, if so... 

[LiberalFox]

29 minutes ago, Innovindil said:

Because people get taxed on their wages and then get taxed when they spend those wages? Not sure what's confusing honestly. 

Alright but it's a bit of a figment of the imagination. You pay income tax on money you earn and pay VAT when you buy goods. You don't buy goods with money you paid as income tax. 

[Foxin_Mad]

5 minutes ago, Alf Bentley said:

 

I don't doubt that people with higher incomes pay more VAT as an absolute figure, for the reasons you've stated.

But not as a proportion of their disposable income. If someone on £20k pays £200 for a TV, that makes a sizeable dent as most of their income will be going on essentials like housing, food, clothing etc.

Even assuming that someone on £200k pays £2000 for a much better TV, that's likely to make a much smaller dent in their disposable income (as well as providing higher value - including for resale).

 

If that same tax is raised through income tax, someone on £200k will be paying proportionally much higher.....unless they avoid/evade income tax, as you've described.

But surely the answer to income tax avoidance/evasion is to make more serious efforts to clamp down on loopholes etc? Not an easy task, granted, but not one most govts are in a hurry to do, given the power and influence of some tax avoiders - some of whom are party donors....

 

If Income Tax can be reliably collected then I am all for it, I am not sure in the current system it is possible. It only really helps if a independent 3rd party is managing your incomings, 

 

There are a lot of people in the public limelight who claim to be 'progressive' who are not paying the correct amount of tax due, because of accounting tricks. This includes pretty much every whining celebrity! 

[Innovindil]

25 minutes ago, Foxin_Mad said:

Its not perfect. I also don't think Income Tax is fair. The way it is collected is not fair.

 

Accountants are readily able to come up with legal schemes to help those with enough money avoid paying their due amounts, this is a particular problem higher up the chain. PAYE works only for those lower down the chain. 

Trouble is, those with money can also just as easily dodge vat. 

 

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bbc.co.uk/news/amp/uk-41886607&ved=2ahUKEwjvx8W_7N7iAhXCsHEKHS3KDf4QFjACegQIBhAB&usg=AOvVaw3JW7usKe2Dxt8jf4LAqymX&ampcf=1

[Buce]

33 minutes ago, Strokes said:

Was there something unique about it that made you buy from the states?

Genuinely intrigued, not bating btw.

 

Yep.

 

It's specialist ultralight gear made from something called DCF (Dyneema Composite Fabrics) which is a strong, waterproof and ridiculously lightweight fabric from which they have been able to produce tents of outstanding quality at less than 500 grams in weight (that doesn't include poles but they are designed to be used with hiking poles); I don't know whether it's a patent issue but it's only available from one manufacturer in the US and it only seems to make it as far as US gear suppliers.

 

https://zpacks.com/products/plexamid-tent#

 

 

 

 

Edited 10 June 2019 by Buce

[Foxin_Mad]

2 minutes ago, Innovindil said:

Trouble is, those with money can also just as easily dodge vat. 

 

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bbc.co.uk/news/amp/uk-41886607&ved=2ahUKEwjvx8W_7N7iAhXCsHEKHS3KDf4QFjACegQIBhAB&usg=AOvVaw3JW7usKe2Dxt8jf4LAqymX&ampcf=1

There are avoidance schemes for all I am sure.

 

Income Tax is avoided by a broader spectrum though, I think. 

 

I know an average person, with an average job who is a bit of a tit.

 

They claim their official earnings as 10k per year and get the reset paid in some kind of loan sorted by an accountant. They also do not pay the correct amount of Maintenance for their 2 children as a result.

 

I report to HMRC on the basis that their lifestyle does not correspond to their income. This must be happening quite a bit with self employed/small business owners. HMRC say everything is above board.

 

I know no-one on earth who can afford 3 news TV, new cars, new kitchen, new windows, new driveway on 10k a year! its a joke!

 

 

[Buce]

14 minutes ago, LiberalFox said:

Alright but it's a bit of a figment of the imagination. You pay income tax on money you earn and pay VAT when you buy goods. You don't buy goods with money you paid as income tax. 

 

Nonsense.

 

You are taxed when you earn it then taxed again when you spend what's left.

[Jon the Hat]

2 minutes ago, Foxin_Mad said:

There are avoidance schemes for all I am sure.

 

Income Tax is avoided by a broader spectrum though, I think. 

 

I know an average person, with an average job who is a bit of a tit.

 

They claim their official earnings as 10k per year and get the reset paid in some kind of loan sorted by an accountant. They also do not pay the correct amount of Maintenance for their 2 children as a result.

 

I report to HMRC on the basis that their lifestyle does not correspond to their income. This must be happening quite a bit with self employed/small business owners. HMRC say everything is above board.

 

I know no-one on earth who can afford 3 news TV, new cars, new kitchen, new windows, new driveway on 10k a year! its a joke!

 

 

They will be in for a shock if they are being paid via loans; HMRC are collecting back taxes as if they were salary