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[George]

I would go for a new thread because I think Tax and Spend are THE critical issues in the forthecoming election. Would be nice to stay away from rag top headlines though.As soon as you start it George I am in.

Disgruntled - thank you for your encouragement! My only hesitation is that I'm suddenly starting too many threads. Perhaps members should be limited to 1 or 2 new threads a month, to avoid anyone hogging the limelight. But, as you say, tax and spend are key issues, so here goes:

1. TAKE, TAKE, TAKE MONEY-GRABBING SINCE 1997
I don't think it matters if these are visible taxes or stealth taxes. They all amount to a hit on most peoples' incomes and savings. Remember, remember as the election comes up. Are you ready to forgive and forget all the following cash raids when you cast your vote?

- Council tax increases - massive since 1997 - way, way above inflation

- fuel duty and over Government charges affecting the sky-high price at the petrol pumps

- sharp increases on National Insurance contributions on earnings

- speed cameras, made-out to be for safety, but really just a cash cow. See here, for example: http://www.dailymail.co.uk/news/article-1256738/Speed-camera-trap-M6-racing-record-3m-haul-fines.html

- the raid which Gordon Brown made on pension funds - crafty because many people don't realise

- appparent Government support for, or tolerance of, clamping firms who take as much money as they can when people park cars

- tax increases due on earnings from April 2010
 
- etc. etc.

There are many others. How have they affected you? What others taxes and charges spring to mind that simply weren't an issue before 1997?

I know any Dail Mail link may be frowned upon but isn't it a fact that speed cameras make £millions. You can't blame the messenger - the Daily Mail in this case. Either it's a fact or it's not.

2. TAXES AND OTHER FINANCIAL BOMBSHELLS expected if Labour gets back in:
- Struggling family pubs are facing a "fun & games" tax bombshell which could drive many more out of business. See here: http://www.newsoftheworld.co.uk/news/749155/Family-pubs-facing-quotfun-amp-gamesquot-tax-bombshell-which-could-drive-them-out-of-business.html

- dog insurance of £hundreds per year

- 10% death tax on top of any inheritance tax due
 
Even if these are the only three - and I'm sure there must be more - it's the mind set of this Government which concerns me the most, rather than any single specific charge. Does it worry you, or do you think they've got it about right, and it's OK if we're all slaves to the state?

[Mighty Hatfield]

Slightly over exaggerated but a fair comment, what happens to our tax?

The title is tax and spend, which i have no problem with, i pay my tax, happily (or as happy as anyone can!) and expect it to be SPENT, on something that affects me or not, as im big enough to accept i live in a society where we look out for each other, rather than just ourselves. Otherwise im seeing no benefit.

So why are there these large reserves at local levels, how can the county for instance, afford to be investing millions of pounds in foreign economies (iceland), why wasnt that 28m spent on repairing pot holes for instance?

And to comment on your anti government slant of the whole way youve presented this (again, fair enough, thats up to you) what alternatives have been proposed by the tories to the issues you raise? After all, itd seem slightly odd to base your vote on this issue, to give it to another party that will simply carry on in the same vein.

[disgruntled]

George
Try this

Historic VAT Rates
FROM
TO
RATE

01.04.73
28.07.74
10%

29.07.74
17.06.79
8%

18.06.79
31.03.91
15%

01.04.91
30.11.08
17.5%

01.12.08
31.12.09
15%

01.01.10
--
17.5%

So Vat under the Tory party doubled during their time in power. Not so much stealth tax as a direct hand in your pocket. Put this in the context of a savage recession and 3M unemployed. Add in the factor that during this period Thatcher paid down national debt to 24% of gdp.

Is this type of fundementalist economic (Hayek in this case) practice something you advocate?

[George]

Historic VAT Rates

I'm not sure about the impact of VAT rate changes on how well off people feel. If Labour considered 17.5% to be wholly unacceptable, they could have put it back to nearer 8% and left it there.

I agree with MH that tax isn't necessarily a bad thing if the funds are wisely spent. I don't consider that £billions spent on Iraq, Afghanistan and interest paid by the Government on the record-breaking public debt is a good way to spend tax revenues.

[Geoff]

The only thing I will say in defence of VAT is that, unlike income tax, it is to a certain extent a discretionary tax in that it can be avoided or deferred by delaying or cancelling the purchase of something one may want, but not necessarily need. However I agree with the underlying point that we are over taxed and furthermore that tax laws are far too complicated.
 
I can also accept the argument about speed cameras, although of course there is a foolproof way of avoiding that particular tax.
 
I would have no problem with swingeing tax rises on cigarettes and alcohol for the same reason,(I do enjoy a drink but no longer smoke), provided corresponding reductions (some chance) were made elsewhere.
 
Where I have a major problem with tax in this country is that if we manage to save part of our income, which has of course been taxed at source, we are further taxed on any income our investments or savings may bring us. I consider that to be nothing short of scandalous.
 
But I will not hold my breath in the hope that if we have a change of government a new, fairer, tax system will appear as if by magic.

[disgruntled]

I agree that VAT is a tax on consumption which in theory affects everyone equally.

Except it does not. In a period of high unemployment it has a disproportionate impact on people living off of benefits and savings. Which is why I linked it to the policy carried out in the 80's. Is it morally right to double the vat rate with 3m unemployed, and at the same time pay down the national debt to 24% of gdp?

I ask this because the current Tory leadership were alone, almost uniquely, in initially opposing government  spending and stimulus in reaction the the downturn. The same leadership that argues for a very rapid reduction in the rate of spend to bring budgets into line, regardless of the impact on economic output, services and jobs.

I put this point over in rebuttal of the headline grabbing words of "Stealth taxes"

I agree we are over taxed, I agree that our system is stupidly complicated. I do not agree that blind partisan comments help to resolve the problem.

Its not about Stealth Taxes, its about a fair and equitable "progressive" tax system. We do not have one. From where I sit the Tory's' I believe are instinctively opposed to a progressive tax system and labour have, under Brown in either role, become overly complicated in their solution.

Of course neither of them want to talk about it as they have neither the ability nor will to do anything radical to resolve the issue.

[Geoff]

Except it does not. In a period of high unemployment it has a disproportionate impact on people living off of benefits and savings. Which is why I linked it to the policy carried out in the 80's. Is it morally right to double the vat rate with 3m unemployed, and at the same time pay down the national debt to 24% of gdp?

The only form of tax that does not have a "disproportionate impact on people living off benefits and savings" is income tax.  My original point contained a gripe about taxation on savings, on the basis that money saved had already been taxed at source.  It is in fact a "double whammy" and I think  tax on savings or investment income is indefensible simply because the original money has been taxed either as income or, in the case of investment income, as corporation tax which reduces any dividends payable and thus disadvantages savers .

There will never be a system of taxation which is totally fair but at least VAT is a tax which can be controlled by the taxpayer to a certain extent.