VAT cut, will it make any difference?

[Thermal]

http://news.bbc.co.uk/1/hi/business/7747985.stm

in the UK a cut of VAT from 17.5% will reduce to 15% until the end of 2011 to encouraging buying, however i just don't think the cut is enough, 2.5% is pittance in my eyes, and it won't help in the long run, however it is a step in the right direction, any thoughts, encourage anyone here to buy more as christmas approaches?

[HoreTore]

15% is the minimum allowed by the EU btw, can't go below that.

Will it make a difference? No idea.

[Husar]

We should refuse to pay value added tax until someone tells us where all this added value is.

[LittleGrizzly]

The only goods i buy with VAT on them are cigerettes and coca cola anyway, i usually get whatever i can afford so it wouldn't really encourage me to spend more as i spend already...

i have had a £500 voucher to get a replacement pc from my insurance for like 4-5 months, so it means i can squeeze some extra value out of that

the added value is the increase of the value of the good

[CountArach]

15% is the minimum allowed by the EU btw, can't go below that.

That truly surprises me.

[Thermal]

and me, i was completely un ware though that wouldnt stop them reducing taxes would it

[Crazed Rabbit]

http://news.bbc.co.uk/1/hi/business/7747985.stm

in the UK a cut of VAT from 17.5% will reduce to 15% until the end of 2011 to encouraging buying, however i just don't think the cut is enough, 2.5% is pittance in my eyes, and it won't help in the long run, however it is a step in the right direction, any thoughts, encourage anyone here to buy more as christmas approaches?

Yes, probably. How big of an effect? Well, the size of the cut (smallish) and the current economic situation make me think the improvement won't be that big.

15% is the minimum allowed by the EU btw, can't go below that.

Really? Wow. How does that all work?

CR

[HoreTore]

Really? Wow. How does that all work?

The EU is a union based on a bunch of laws on trade and commerce. By joining, you agree to follow them. Kinda fundamental...

[Crazed Rabbit]

The EU is a union based on a bunch of laws on trade and commerce. By joining, you agree to follow them. Kinda fundamental...

Most trade unions I've heard of have maximum standards on trade restrictions, like tariffs, not minimum requirements for taxes.

The idea of a union like that making laws to protect high-tax countries is odd.

CR

[Hosakawa Tito]

[Thermal]

sorry i dont quite get that, explain please

[Louis VI the Fat]

Most trade unions I've heard of have maximum standards on trade restrictions, like tariffs, not minimum requirements for taxes.

The EU is not a trade union. It is an economic union.

As a capitalist bloc, the EU seeks to harmonise taxes. Because, in order to get a fully functioning market, it is essential to have as little government intervention as possible. By setting minimum and maximum VAT rates, governments can't aid the competitiveness of their businesses with taxes as instruments.

If it were up to me, the EU would set a single fixed rate for the entire union so the market can function undistorted by government interventions altogether.


A second issue is, that most businesses aren't national anymore, but multinational. Companies will play governments against each other for lower taxes. This is the world turned upside down. The idea is that businesses compete with one another, instead of seeking out government hand-outs and incentives. The EU, being a union of small to mid-sized states, protects these states and their consumers against large multinational corporations, and forces them to compete with each other.

The idea of a union like that making laws to protect high-tax countries is odd.

As always, people tend to forget that the EU sets a maximum tax rate as well.

I, for one, applaud the UK's socialist measure of lowering VAT. VAT is a regressive tax. I do wish the minumum and maximum VAT rates were set lower so that Britain could lead the EU on to an even more socialist tax regime.


Market capitalism, undistorted by governmental incentives, combined with progressive tax regimes make for splendid countries.

[King Jan III Sobieski]

I'm unemployed and live in the U.S.... so, I had to vote "gah"

[Evil_Maniac From Mars]

Dan Hannan.

[Alexander the Pretty Good]

More surprising than the mere existence of a uniform VAT to me is that the minimum is set so high...

[HoreTore]

More surprising than the mere existence of a uniform VAT to me is that the minimum is set so high...

It was set according to the level of each country at the time they introduced it.'

And no, the reason for it is NOT to "keep taxes high" or whatever. It's one of a number of things in place to prevent individual countries to play with their economies, and by that reducing the economic stability of of the EU. As Louis said, ideally it wouldn't be a min/max, it would be a set rate by the EU that individual countries cannot change. We live together, we trade together, we tax together.

Oh, and on topic:

SSB, the main statistics agency here, said yesterday that even a tax cut of 19 billion NOK(by comparison, our defence budget is 30 billion NOK) wouldn't create more than around 2500 more jobs. We wouldn't spend the extra money, we would put it in the bank. So take that, tax-cut whores! Bring on the socialism!

[Tribesman]

VAT cut, will it make any difference?
One measure would be to ask shopkeepers in the six counties how much their trade has increased since the cut , but that angle might be more suitable in a topic about uniform VAT throughout the Union .

[Mangudai]

More surprising than the mere existence of a uniform VAT to me is that the minimum is set so high...

More proof that VAT distorts economic behavior. The EU higher ups know that a country with low VAT has a competitive advantage.

[Louis VI the Fat]

After getting a taste of it this morning, I am now very impressed by the firmness of Britain's balls. Very tough, will resist any amount of outside pressure, but still very responsive. Every continental should wish he had even one of them.



In a breach of diplomatic standards, Germany's finance minister Steinbrueck criticised the UK's decision to cut VAT and raise national debt levels.

Cracks emerged in the global effort to drag the world out of recession on Thursday with Germany attacking Britain ahead of an EU summit for rushing into debt to bail out industries and pump up growth.
In a move that suggested trouble ahead for concerted European and perhaps world efforts to end the financial crisis and restore global economic growth, Germany criticised countries for rushing into untested economic rescue packages.

Spoiler Alert, click show to read: 

Finance Minister Peer Steinbrueck urged governments to pause before pledging to spend billions of dollars to try to push their economies out of trouble."The speed at which proposals are put together under pressure that don't even pass an economic test is breathtaking and depressing," he said in an interview with Newsweek magazine, published on the magazine's website on Wednesday.
He singled out British Prime Minister Gordon Brown for particular criticism, accusing him of switching to economic policies that would saddle a generation with debt. "The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking," he said.

Another German policymaker, European Central Bank Executive Board member Juergen Stark, also indicated concerns about responses to the crisis, saying on Wednesday that the ECB does not have a lot of room for manoeuvre after its interest rate cut last week. The comments came as European Union leaders were to meet in Brussels to discuss a 200-billion euro ($260-billion) stimulus package to wrench the bloc out of recession.

However, and not for the first time in modern history, Britain's balls proved to be much sturdier than the Germans expected.

Schools Secretary Ed Balls hit back, suggesting the comments had more to do with Germany's internal politics in its ruling coalition than the nature of the global response to the economic downturn.
Mr Steinbruck is a member of the Social Democratic Party which shares power with Angela Merkel's rival Christian Democrats.

Mr Balls said Mr Steinbruck was known for his "strong and robust views" but he defended the UK's course of action in cutting taxes and raising borrowing, saying it had widespread support across the world.
"It is the right thing to do to act now to keep jobs, to keep people in their homes and to keep the economy moving," he told Sky News. "We need to save the world from a deeper downturn and we will only do that by concerted international action together. Britain, and Gordon Brown, is leading that action."

On the eve of an EU summit, a row between Germany and the UK is not really what we need.
Apart from that, I think I must side with Brown's handling of th crisis.

[Husar]

After getting a taste of it this morning, I am now very impressed by the firmness of Britain's balls. Very tough, will resist any amount of outside pressure, but still very responsive. Every continental should wish he had even one of them.

In a breach of diplomatic standards, Germany's finance minister Steinbrueck criticised the UK's decision to cut VAT and raise national debt levels.

However, and not for the first time in modern history, Britain's balls proved to be much sturdier than the Germans expected.

On the eve of an EU summit, a row between Germany and the UK is not really what we need.
Apart from that, I think I must side with Brown's handling of th crisis.

Bunch of rubbish, if the guy was true to his name he wouldn't be afraid to let some companies fail, real men with balls do not need homes, they live in caves.
Steinbrück seems to handle this crisis very well IMO, he doesn't give bailouts to every shmuck who cannot manage a company and when he does, he may just tie them to certain restrictions, just like it should be. Like I've said before, managers get paid for their responsibility, if they do not want to be responsible they should get less money.

All these measures just fuel the recession anyway because people will think "Oh noes, the government is heavily responding, it must be really, really bad, let's stop investing and save some money(that will be worthless in a superinflation anyway)". We're all doomed if we go on like that, those high-payed managers should drag their companies out of the dirt themselves if they can, if they can't, we do not need their services anymore, that's a similar standard to the one they apply when hiring people.

[Incongruous]

Dan Hannan.

Bloody hell, that man can speak can't he?

[Evil_Maniac From Mars]

Bloody hell, that man can speak can't he?

He is even better than Nigel Farage, in my opinion - and Farage is good.

I mean...
...isn't it great?

[Louis VI the Fat]

...isn't it great?

No, no it isn't. It isn't great at all.

It is not great for a member of parliament to compare a constitutional reform proposal with Germany's 1933 Ermächtigungsgesetz Act that gave Adolf Hitler unlimited power.

It is, instead, an outrageous insult to both the man in front of him, EP's German president Hans-Gert Poettering, and to the victims of Hitler. And it makes a complete mockery of the dignity of the EP.

What an utter buffoon.

Praise to that British MEP that demanded he step outside with him - there's a proper British conservative for you.

[Incongruous]

Indeed, but I find that other fellow quite good.

Actually, just saw that Question time with Farrage, what a laugh.

[Evil_Maniac From Mars]

It is not great for a member of parliament to compare a constitutional reform proposal with Germany's 1933 Ermächtigungsgesetz Act that gave Adolf Hitler unlimited power.

I don't think he was comparing the Lisbon Treaty to the Ermächtigungsgesetz (Ermächtigungsgesetz Act is, I think, redundant ), but to another piece of legislation.

By the letter of history, he was incorrect, but as an analogy or a comparison, the validity of the statement can be debated. For example, if he believes that the text of the document in question gave arbitrary, unlawful, and undemocratic power to the chair, he has every right to draw comparison to the Ermächtigungsgesetz. An extreme analogy, to be sure, but not necessarily a bad one.

What an utter buffoon.

Only to a pro-Treaty person. Martin Schulz, now that is a buffoon.