VAT rate down to 15%

[OldNick]

Lol. I'm sorry, but your last two posts have been ridiculous.

 

Part of the job of being in opposition is, if you disagree with the government, to make it known what your alternative is. If the government steals your idea than great. I'd love to know the actual number of Lib Dem policies that Tory and Labour have stolen year on year.

 

The thing is, the Tories are clueless (although Ken Clarke is currently speaking very well) and are almost denying there is a problem and have no idea how to help people. So far the some total of their thoughts are to freeze Council Tax, which is so embarrassingly flawed that they barely even mention it!

to freeze council tax is flawed, why is that?

We as a nation when things have settled need a politician strong enough to grasp the nettle and get the country out of relying on credit.We need tight control on personal lending and get people to act responsibly with their spending.

[bungle]

I cant recall anybody knicking any of the Liberals ideas, as I dont see many people wearing cycle clips by law or that children should be whispered to and never a loud voice be heard.

 

Well, I'm not sure anyone was in any doubt that you had very little idea of what you were talking about, but in case they were this comment has proved it. Well done you.

[OldNick]

Well, I'm not sure anyone was in any doubt that you had very little idea of what you were talking about, but in case they were this comment has proved it. Well done you.

Liberals not able to take a joke, surely not

[Guest Hacienda]

Well, I'm not sure anyone was in any doubt that you had very little idea of what you were talking about, but in case they were this comment has proved it. Well done you.

 

No one was in doubt Bungle.

[OldNick]

No one was in doubt Bungle.

the LibLab pact has raised its head again LOL

[bridge too far]

I've just done a bit of research on VAT tax rates over the years.

 

"In 1979, the UK had a Zero Rate, a Basic Rate of 12.5 per cent charged on "luxury" items and a reduced rate of 8 per cent charged on most other goods and services. When the Conservatives came to power that year, Chancellor Geoffrey Howe increased both of these to a single rate of 15 per cent, to partially offset the impact of large cuts to the Basic and Higher Rates of Income Tax. This was portrayed as a deliberate move aimed at shifting the burden of taxation from earnings to consumption.

 

VAT remained at 15 per cent until 1991, when Norman Lamont increased it to 17.5 per cent. This step was intended to provide revenue for the "Community Charge Reduction Scheme", aimed at assisting local authorities suffering from the fall-out of massive levels of defaulting on the "poll tax"."

 

Interesting.....

[Weston Super Saint]

I've just done a bit of research on VAT tax rates over the years.

 

"In 1979, the UK had a Zero Rate, a Basic Rate of 12.5 per cent charged on "luxury" items and a reduced rate of 8 per cent charged on most other goods and services. When the Conservatives came to power that year, Chancellor Geoffrey Howe increased both of these to a single rate of 15 per cent, to partially offset the impact of large cuts to the Basic and Higher Rates of Income Tax. This was portrayed as a deliberate move aimed at shifting the burden of taxation from earnings to consumption.

 

VAT remained at 15 per cent until 1991, when Norman Lamont increased it to 17.5 per cent. This step was intended to provide revenue for the "Community Charge Reduction Scheme", aimed at assisting local authorities suffering from the fall-out of massive levels of defaulting on the "poll tax"."

 

Interesting.....

 

More interesting than the number of years that Labour have been in power without reducing it back to it's previous levels?

[Ponty]

Exactly WSS. BTF likes harking back 20 years and saying, "The Tories brought in this 'n that tax." but falls short of explaining why Labour have done nothing to reduce them, or in most cases explain why they've continued to raise them.

[Guest Hacienda]

More interesting than the number of years that Labour have been in power without reducing it back to it's previous levels?

 

By law (EU) they wouldn't have been able to reduce it below 15% anyway.

[Weston Super Saint]

By law (EU) they wouldn't have been able to reduce it below 15% anyway.

 

And yet we could leave the EU if they really wanted to do it so badly.

[saintwarwick]

I've just done a bit of research on VAT tax rates over the years.

 

"In 1979, the UK had a Zero Rate, a Basic Rate of 12.5 per cent charged on "luxury" items and a reduced rate of 8 per cent charged on most other goods and services. When the Conservatives came to power that year, Chancellor Geoffrey Howe increased both of these to a single rate of 15 per cent, to partially offset the impact of large cuts to the Basic and Higher Rates of Income Tax. This was portrayed as a deliberate move aimed at shifting the burden of taxation from earnings to consumption.

 

VAT remained at 15 per cent until 1991, when Norman Lamont increased it to 17.5 per cent. This step was intended to provide revenue for the "Community Charge Reduction Scheme", aimed at assisting local authorities suffering from the fall-out of massive levels of defaulting on the "poll tax"."

 

Interesting.....

 

Correct, the idea was to put more money into the taxpayers pocket through tax cuts and to recoup that through higher taxation on luxury goods, what it meant was that the taxpayer had the choice of whether they spent that extra revenue or kept it. Good choice imo.

[bungle]

And yet we could leave the EU if they really wanted to do it so badly.

 

Why on earth would we want to do something that stupid?

[Weston Super Saint]

Why on earth would we want to do something that stupid?

 

Oh I don't know, maybe to hold up the principles that BTF was alluding to??

[Guest Hacienda]

And yet we could leave the EU if they really wanted to do it so badly.

 

WTF would we want to do that?

[Scummer]

WTF would we want to do that?

 

Is there an echo in here?

[OldNick]

Why on earth would we want to do something that stupid?

you still havent answered why it is flawed to freeze council tax

[Guest Hacienda]

you still havent answered why it is flawed to freeze council tax

 

You still haven't explained why you think it's a good idea.

[bungle]

you still havent answered why it is flawed to freeze council tax

 

If you read the thread you'd see I answered on page 1 or 2. Sorry if that is difficult for you.

[Guest Hacienda]

If you read the thread you'd see I answered on page 1 or 2. Sorry if that is difficult for you.

 

http://www.saintsweb.co.uk/forum/showpost.php?p=117022&postcount=9

 

So Mr Thick can find it.

[bridge too far]

More interesting than the number of years that Labour have been in power without reducing it back to it's previous levels?

 

Not at all - for the purposes of expanding my own knowledge, I thought I'd look up the levels of VAT past and present.

 

Nothing more sinister than that actually

[bridge too far]

Exactly WSS. BTF likes harking back 20 years and saying, "The Tories brought in this 'n that tax." but falls short of explaining why Labour have done nothing to reduce them, or in most cases explain why they've continued to raise them.

 

I'm laughing at myself for being such an anorak but look what I've found:

 

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

 

I don't know how up to date this is but bear with it and scroll down the page. There you can see the comparative data.

 

We're not as heavily taxed as we like to think we are

[Weston Super Saint]

I'm laughing at myself for being such an anorak but look what I've found:

 

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

 

I don't know how up to date this is but bear with it and scroll down the page. There you can see the comparative data.

 

We're not as heavily taxed as we like to think we are

 

Are you saying the Tories only adopted a moderate taxation policy whilst the rest of the world was taxing their citizens heavily

[Weston Super Saint]

WTF would we want to do that?

 

Oh I don't know, maybe to hold up the principles that BTF was alluding to??

 

It's the same answer to the same question

[Weston Super Saint]

If you read the thread you'd see I answered on page 1 or 2. Sorry if that is difficult for you.

 

But you mention that freezing council tax would create a 'big hole' in local council's finances, which is just blatent scare mongering isn't it?

 

If the tax rate is frozen - ie it doesn't go up or down - then the revenue collected will be pretty much the same won't it? Therefore no mysterious 'big hole' just the same money to spend next year as there was this year.

[bridge too far]

Are you saying the Tories only adopted a moderate taxation policy whilst the rest of the world was taxing their citizens heavily

 

I think the figures are more recent than that WSS.

 

Believe it or not, I'm not making a political point here.

 

In this country, we tend to believe that we are one of the most heavily taxed nations in the world, mainly because of the 'stealth taxes' headlines of the press.

 

I'm simply pointing out that we're not, according to this data (which is, I would think, independent).

[bridge too far]

But you mention that freezing council tax would create a 'big hole' in local council's finances, which is just blatent scare mongering isn't it?

 

If the tax rate is frozen - ie it doesn't go up or down - then the revenue collected will be pretty much the same won't it? Therefore no mysterious 'big hole' just the same money to spend next year as there was this year.

 

Going off at a slight tangent here: Freezing council tax won't actually put money in people's pockets IMMEDIATELY. All it will do is to keep people's outgoings the same as they are currently.

 

So no more money would flow INTO the economy right now. So it won't solve the problems NOW. It's my opinion that this is how the Conservatives are showing their ignorance of the situation. They don't seem to be able to grasp that steps needed to be taken NOW, not next year. Nearly every other sophisticated economy in the world understands this and is taking similar steps. George Osborne is, apparently, standing in splendid isolation.

 

Given the low rate of inflation, I would think council tax increases will be minimal next year anyway.

[Weston Super Saint]

I think the figures are more recent than that WSS.

 

Believe it or not, I'm not making a political point here.

 

In this country, we tend to believe that we are one of the most heavily taxed nations in the world, mainly because of the 'stealth taxes' headlines of the press.

 

I'm simply pointing out that we're not, according to this data (which is, I would think, independent).

 

Well those figures only include income tax, NI and VAT - all pretty much determined by the Tories and NOT altered by Nu Labour.

 

There is no mention of the stealth taxes - such as duty on cigarettes, alcohol and fuel - so it's kind of unfair to include those.

[Weston Super Saint]

Going off at a slight tangent here: Freezing council tax won't actually put money in people's pockets IMMEDIATELY. All it will do is to keep people's outgoings the same as they are currently.

 

So no more money would flow INTO the economy right now. So it won't solve the problems NOW. It's my opinion that this is how the Conservatives are showing their ignorance of the situation. They don't seem to be able to grasp that steps needed to be taken NOW, not next year. Nearly every other sophisticated economy in the world understands this and is taking similar steps. George Osborne is, apparently, standing in splendid isolation.

 

Given the low rate of inflation, I would think council tax increases will be minimal next year anyway.

 

I think we're all in agreement and amazement at how George Osbourne not only got a job but manages to keep hold of it!!!

[bungle]

But you mention that freezing council tax would create a 'big hole' in local council's finances, which is just blatent scare mongering isn't it?

 

If the tax rate is frozen - ie it doesn't go up or down - then the revenue collected will be pretty much the same won't it? Therefore no mysterious 'big hole' just the same money to spend next year as there was this year.

 

Unfortunately Council spending goes up year on year because of...inflation! Staff wages go up, cost of contractors go up, cost of the services they have to buy goes up. They need to be able to raise Council Tax by inflation to keep pace with this.

 

The big problem with the Tory plan (if one suggestion is a plan!) is that they haven't actually said how the will compensate local government. Local government will have spending plans and forecasts that rely on certain revenue streams, it would be irresponsible of central government to put all of that in jeopardy.

[Guest Hacienda]

But you mention that freezing council tax would create a 'big hole' in local council's finances, which is just blatent scare mongering isn't it?

 

If the tax rate is frozen - ie it doesn't go up or down - then the revenue collected will be pretty much the same won't it? Therefore no mysterious 'big hole' just the same money to spend next year as there was this year.

 

If you just freeze council tax (and like everyone I'd love mine frozen or reduced) it won't put anymore money in anyone's pocket, just ensure that no more would go out. Yep, I can see how that would kick start the economy.

 

It would also mean that any rises in costs, such as wages, would have to be funded from the same amount of money which would lead to cuts and redundancies. Yep. a deffo kick start there.

[bridge too far]

Well those figures only include income tax, NI and VAT - all pretty much determined by the Tories and NOT altered by Nu Labour.

 

There is no mention of the stealth taxes - such as duty on cigarettes, alcohol and fuel - so it's kind of unfair to include those.

 

I would imagine that's included under the heading VAT/Sales/GST in the tables. Some other countries put these taxes on food which we don't do.

 

Here's another gem for you WSS. This is from the Adam Smith Institute - hardly a bastion of socialism

 

It shows Tax Freedom Day since 1965. I'm sure you know what that means. You will see that it has hardly changed over 40 years and, as the legend to the right of the table explains, it includes 'stealth taxes'.

 

http://www.adamsmith.org/a-history-of-tax-freedom-day/

[Weston Super Saint]

Unfortunately Council spending goes up year on year because of...inflation! Staff wages go up, cost of contractors go up, cost of the services they have to buy goes up. They need to be able to raise Council Tax by inflation to keep pace with this.

 

The big problem with the Tory plan (if one suggestion is a plan!) is that they haven't actually said how the will compensate local government. Local government will have spending plans and forecasts that rely on certain revenue streams, it would be irresponsible of central government to put all of that in jeopardy.

 

Maybe they could have saved some of the additional revenue they received when they increased council tax rates above inflation...

 

http://www.independent.co.uk/news/uk/politics/council-tax-to-rise-above-inflation-426246.html

 

http://archive.thenorthernecho.co.uk/2008/1/24/241218.html

 

http://news.bbc.co.uk/1/hi/scotland/2757783.stm

 

http://www.thisismoney.co.uk/tax-advice/council-tax/article.html?in_article_id=425162&in_page_id=82

 

I particularly like this one

 

http://www.telegraph.co.uk/finance/3521224/Council-tax-bills-to-surge-as-inflation-plunges.html

[bungle]

Or maybe central government could give Council's a better settlement? Or maybe local government needs to raise above inflation to spend on important projects. It's all very well to pick isolated examples, but I'm afraid that just avoids all of the facts.

 

And Hacienda and BTF are dead right in that freezing Council Tax won't stimulate the economy either.

[Weston Super Saint]

I would imagine that's included under the heading VAT/Sales/GST in the tables. Some other countries put these taxes on food which we don't do.

 

I don't think so, as that figure is quoted at 17.5%, which until Monday is the VAT rate. We pay duty on fuel and then VAT on top of that, so yes technically 17.5% is accurate, but doesn't account for the duty....

[Weston Super Saint]

Or maybe central government could give Council's a better settlement? It's all very well to pick isolated examples, but I'm afraid that just avoids all of the facts.

 

And Hacienda and BTF are dead right in that freezing Council Tax won't stimulate the economy either.

 

I wasn't trying to pick isolated examples, but a broad spectrum of examples from up and down the country over a number of years trying to highlight that council tax increases ABOVE the rate of inflation have been prevalent for many years. I'm sure I could find many many more examples for you as I haven't exhausted page 1 of 1000 odd pages of google search yet, but really think these things are accomplished better by Crouchie / INS

 

I also like the way you've gone from Central Government ordering councils to reduce council tax as a bad thing as it would eventually need to be paid back, to Or maybe local government needs to raise above inflation to spend on important projects. Now just where exactly is this extra money coming from?

[bridge too far]

Maybe they could have saved some of the additional revenue they received when they increased council tax rates above inflation...

 

http://www.independent.co.uk/news/uk/politics/council-tax-to-rise-above-inflation-426246.html

 

http://archive.thenorthernecho.co.uk/2008/1/24/241218.html

 

http://news.bbc.co.uk/1/hi/scotland/2757783.stm

 

http://www.thisismoney.co.uk/tax-advice/council-tax/article.html?in_article_id=425162&in_page_id=82

 

I particularly like this one

 

http://www.telegraph.co.uk/finance/3521224/Council-tax-bills-to-surge-as-inflation-plunges.html

 

The Scottish article is from 5 years ago! And I think, although I'm sure Bungle will tell me if I'm wrong, that Scotland determines its own cap?

 

These articles point out that council spending is to be CAPPED. If my (conservative) district council wants to limit next year's rise to 0%, it can do so.

 

However, no doubt, care for the elderly, refuse collection, street cleaning etc. etc. will be suffer. Police and Fire and education services may then also be reduced as local councils pay part of the council tax to these services (its called a precept).

[bungle]

I wasn't trying to pick isolated examples, but a broad spectrum of examples from up and down the country over a number of years trying to highlight that council tax increases ABOVE the rate of inflation have been prevalent for many years. I'm sure I could find many many more examples for you as I haven't exhausted page 1 of 1000 odd pages of google search yet, but really think these things are accomplished better by Crouchie / INS

 

I also like the way you've gone from Central Government ordering councils to reduce council tax as a bad thing as it would eventually need to be paid back, to Or maybe local government needs to raise above inflation to spend on important projects. Now just where exactly is this extra money coming from?

 

That's a general point about Council tax levels. At no point have I said they only raise at the level of inflation, just that they need to do that to cover costs.

[Weston Super Saint]

The Scottish article is from 5 years ago! And I think, although I'm sure Bungle will tell me if I'm wrong, that Scotland determines its own cap?

 

These articles point out that council spending is to be CAPPED. If my (conservative) district council wants to limit next year's rise to 0%, it can do so.

 

However, no doubt, care for the elderly, refuse collection, street cleaning etc. etc. will be suffer. Police and Fire and education services may then also be reduced as local councils pay part of the council tax to these services (its called a precept).

 

How will they suffer?

 

Will they suddenly disappear into the ether?

 

Perhaps if the local council deems these services less important than the local electorate do, they will be voted out at the next election...

[Weston Super Saint]

That's a general point about Council tax levels. At no point have I said they only raise at the level of inflation, just that they need to do that to cover costs.

 

But that's the whole point of Council Tax isn't it?

 

In an ideal world - no matter whose Economic principles you use, or which text book you take them from - Council Tax should only ever rise at the same rate as inflation.

[bungle]

But that's the whole point of Council Tax isn't it?

 

In an ideal world - no matter whose Economic principles you use, or which text book you take them from - Council Tax should only ever rise at the same rate as inflation.

 

Why is that then? Local Councils may need to take on important capital projects, need money for developments, or want to alter the service they provide in a significant fashion. Local Councils have control over lots of things, y'know. There may also have been a population or demographic shift which means more or fewer people are paying Council Tax, or re-classification of homes may lead to a shift in banding which would need to be offset to ensure a balanced budget.

[bridge too far]

Bungle's right (BTF in agreement with fence-sitter shocker :shock:)

 

Another consideration is this. Councils have to have long-term plans, usually a 5 year programme. If the unexpected happens they can be over budget.

 

In the past 12 months, I can think of two examples of this. 1) the cost of fuel and 2) the fall in the property market (as councils often dispose of property as part of a business case to build a new school for example).

[Weston Super Saint]

Unfortunately Council spending goes up year on year because of...inflation! Staff wages go up, cost of contractors go up, cost of the services they have to buy goes up. They need to be able to raise Council Tax by inflation to keep pace with this.

 

But that's the whole point of Council Tax isn't it?

 

In an ideal world - no matter whose Economic principles you use, or which text book you take them from - Council Tax should only ever rise at the same rate as inflation.

 

Why is that then? Local Councils may need to take on important capital projects, need money for developments, or want to alter the service they provide in a significant fashion. Local Councils have control over lots of things, y'know. There may also have been a population or demographic shift which means more or fewer people are paying Council Tax, or re-classification of homes may lead to a shift in banding which would need to be offset to ensure a balanced budget.

 

LOL is all I can say.

 

Besides aren't these capital projects funded from separate funding from Central Gov't?

[bridge too far]

LOL is all I can say.

 

Besides aren't these capital projects funded from separate funding from Central Gov't?

 

Not all of them. There are a number of central government initiatives, to be sure, such as Building Schools for the Future (I'm currently auditing a number of such schemes in a Midlands council) but quite often local councils have to use (and justify the use) of 'their own' money for smaller capital schemes. Many of them use a yardstick called 'Invest to Save'. I suggest this is self-explanatory.

 

Capital schemes aren't necessarily buildings. They can be IT infrastructures, for example.

[stevegrant]

They can be IT infrastructures, for example.

For which the government (whether it be under a Labour or Conservative leadership) is well known for it's "efficient" use of funds...

[OldNick]

If you read the thread you'd see I answered on page 1 or 2. Sorry if that is difficult for you.

I see your post and why would the council tax not be able to be frozen.The councils would have to cut their cloth accordingly just like all people in the business world. The councils would have to take a proper look at waste and make plans neccessary.

[OldNick]

http://www.saintsweb.co.uk/forum/showpost.php?p=117022&postcount=9

 

So Mr Thick can find it.

I thank you for your trouble, my original post was to a post later in this thread. i didnt trawl through all the earlier stuff as I only arrived back from my holiday in Florida where I was mixing with those capitalist Americans.

[bungle]

LOL is all I can say.

 

Besides aren't these capital projects funded from separate funding from Central Gov't?

 

I don't know what you are laughing at as you are clearly confused. Council Tax is pretty much always going to need to go up by inflation, which is why freezing it is ridiculous. However, that is different from saying it ONLY goes up by inflation.

[Mole]

I see your post and why would the council tax not be able to be frozen.The councils would have to cut their cloth accordingly just like all people in the business world. The councils would have to take a proper look at waste and make plans neccessary.

 

Tax cuts should be made for those most in need by raising taxes for those who can afford to pay it. Also tax dodging scum who live in places like Jersey should be dealt with.

[bungle]

I see your post and why would the council tax not be able to be frozen.The councils would have to cut their cloth accordingly just like all people in the business world. The councils would have to take a proper look at waste and make plans neccessary.

 

This is laughable and shows a total lack of understanding of local government. I suggest reading this thread and you can see exactly how stupid and serious a centrally imposed knee-jerk freezing of Council Tax by central government would be.

 

Again, I make the more important point: the Tories have not (and will not!) say how they are going to stop local Council's been affected by this.

[OldNick]

Tax cuts should be made for those most in need by raising taxes for those who can afford to pay it. Also tax dodging scum who live in places like Jersey should be dealt with.

That is of course valid in some cases. I believe everyone earning more than me should pay higher taxes, and all those on my income and lower have theirs cut.