It’s not progressive to cut income tax while raising VAT


9:10 am - June 22nd 2010

by Sunder Katwala    


      Share on Tumblr

VAT is a tax which hits the poorest hardest. As the Fabian Society’s Tim Horton has noted:

The richest 10% pay one in every 25 pounds of their income in VAT; the poorest 10% pay one in every seven pounds as VAT (Source: Office of National Statistics, References here).

Yet raising the income tax threshold does nothing for the poorest households.

As the Institute of Fiscal Studies pointed out in its manifesto analysis:

Those individuals with incomes too low to pay tax will not gain at all from this. In 2009-10, only 62% of the adult population had a high enough income to pay income tax … in any given year around one in four families contains no income tax-payer. But these figures are a reminder that income tax cuts are not well targetted to help the poorest in society.

It is being reported that George Osborne plans in today’s budget to begin to increase the income tax threshold, but will exclude higher rate tax-payers from gaining alongside basic rate taxpayers.

But seeking to mitigate the impact in that way does not change the fact that the government appears to be able to find £3.7 billion to spend on tax cuts despite claiming we are on the “road to ruin”, yet has structured the giveaway in a way which excludes most of the poorest quarter of households, , who pay a very high proportion of their income in indirect taxes.

So, in its election analysis, the non-partisan IFS was very puzzled as to why the LibDem party which talked so much about the proportion of income paid by the poor in tax would focus so heavily on income tax threshold changes, even claiming to have “taken the poorest out of tax” on this basis.

…Those with the lowest incomes would not benefit from this reform. And families with two taxpayers will benefit more than families with one taxpayer, who tend to be worse off.

Thus, overall, better off families (although not the very richest) would tend to gain most in cash terms from this reform.

But clearly £705 would be less valuable to those on higher incomes than to those on lower incomes as a percentage of income: the largest gains are around the upper-middle of the income distribution rather than at the top.

In isolation, this giveaway could not be described as progressive, but to consider the distributional impact of the Liberal Democrats’ package as a whole we must also consider who would lose from the tax rises they would introduce to pay for this tax cut …

Broadly speaking, the Liberal Democrat package would redistribute from the well-off to middle-income families – augmenting the progressive pattern of Labour’s pre-announced measures but doing little for the poorest households. This latter feature might appear odd given the Liberal Democrats’ often-expressed anger at the relatively high rate of tax paid on the gross income of the poorest households.”

The IFS analysis on who gains from raising income tax thresholds was very similar to the earlier critique published by Left Foot Forward and the Fabians.

Though this critique was vigorously contested by LibDems, nobody made any serious attempt to contest the evidence about where the gains of raising the tax threshold went.

Rather LibDems pointed to the progressive tax-raising policies, like the Mansion Tax, which were (then) going to pay for it, but which are mostly (now) no longer part of the picture

    Share on Tumblr   submit to reddit  


About the author
Sunder Katwala is a regular contributor to Liberal Conspiracy. He is the director of British Future, a think-tank addressing identity and integration, migration and opportunity. He was formerly secretary-general of the Fabian Society.
· Other posts by


Story Filed Under: Blog ,Conservative Party ,Economy ,Libdems ,Westminster

Sorry, the comment form is closed at this time.


Reader comments


Change the record already.

“these figures are a reminder that income tax cuts are not well targetted to help the poorest in society.”

It was never about that anyway, as you’ve repeatedly been told.

2. Luis Enrique

Sunder,

I think this is weak stuff. It’s no criticism of the reform of the tax system designed to help low wage tax payers that it does not help those who don’t pay tax. No reform of the tax system can help those who don’t pay tax. I really don’t like to see left wingers arguing against raising the income tax threshold, something that will help low waged working people. If you think we need to do more, something else, to help those who are too poor to pay tax, fine.

Sorry to blow own trumpet, but the IFS aren’t being too clever with how they are using household income data – they are confusing being in the upper half of the static household income distribution with being well off, because they miss how incomes change over the years. See my post on this site Data Abuse

However, income tax cuts lower the transition point from when it is economically better to be on benefits than it is to be in work.

For people on the lowest rung of the employment ladder the proposed income tax cut can be a considerable benefit to working people.

You might want a tax system that benefits everyone (except nasty scum sucking rich people), but in practical terms, that isn’t possible. Given the choice, isn’t gearing the tax system to being less punitive against having a job a good idea?

Ian Mansfield @ 3

However, income tax cuts lower the transition point from when it is economically better to be on benefits than it is to be in work.

Utter bollocks! Income tax is no barrier to taking a low paid job. I very much doubt you could show me a reasonable scenario where the income tax taken from the wages of a poorly paid job would render the person worse off. The obstacles to employment for the poorly paid people are things like loss or rent rebate/benefits and the loss council tax as well things like child care, transport costs etc.

It’s no use comparing the richest 10% with the lowest 10%, of course the richest don’t spend that much of their income of VAT.

Take someone on median wages, you’ll see that they spend more in VAT than the poorest 10%.

Without mentioning;

the poorest people in Britain are those on out of work benefits, that’s £40 a week if I’m not wrong. If you’re earning £5.80 presumably you’re only really buying food (that’s essentially what the benefit exists for) so your gross spending probably won’t go up at all.

I do not have the projections worked out, but I do hope the increase in both the personal allowance and VAT happens in a manner which enhances the fairness of the former while tempering the unfairness of the latter.

I am no fan of a VAT increase. Increasing the earnings threshold WILL be fairer in the long run – it would surely encourage people to find jobs if they know the first £6,500, then maybe £7,500, then £8,000, then ultimatley £10,000, will be largely free from income tax. VAT offsets any benefit – and it does not discriminate much either.

Firm but fairness….It may not be “progressive”, but cutting income tax is a moral right in these troubled times.

7. Sunder Katwala

There are a range of different approaches to trying to achieve what the LibDems think they are trying to achieve, and which would be more progressive.

Follow the “this extract” link (for a PDF file) for an extract from the Fabian Solidarity Society book containing a detailed comparison of the impact of different ways of raising allowances, investing in tax credits, or restructuring how tax allowances and reliefs work. The book argues that progressives should advocate converting tax allowances into a flat tax rebate. It also makes the case for a universal tax credit.

http://www.fabians.org.uk/publications/publications-news/tax-fairness

Those who think that is madly left-wing might note that Milton Friedman advocated a similar approach to the debate, in his negative income tax.

8. Luis Enrique

Sunder

“we have a better idea” does not equal “this is a bad idea”

Peejay @ 5

the poorest people in Britain are those on out of work benefits, that’s £40 a week if I’m not wrong. If you’re earning £5.80 presumably you’re only really buying food (that’s essentially what the benefit exists for) so your gross spending probably won’t go up at all.

Not true though, you are also buy clothing and electricity, both of which attract VAT. But any spending that attracts VAT will make the poorer worse off.

“I think this is weak stuff. It’s no criticism of the reform of the tax system designed to help low wage tax payers that it does not help those who don’t pay tax”

People on benefits do pay tax, just not income tax. If you decrease a tax which the poorest people don’t pay, while increasing taxes which they do pay, you make them worse off. This strikes me as an entirely fair criticism.

The dishonest thing is the spin about “taking the poorest out of tax”, which a surprising number of people who should know better seem to have fallen for.

Jim @ 9;

I’m quite sure that the VAT rate of domestic energy consumption is 5% and will therefore be unaffected. Essentially, the only raise that the poorest will suffer will be on garments.

I think it’s therefore unfair to say that the poorest will be the most affected, the middle classes spend a high percentage of their incomes on clothing and other items on which VAT is paid. The poorest spend most of their income on essentials, the middle classes spend a higher percentage of their incomes on the items that will be hit by the increase in VAT.

Is not there an underlying point here, which is not whether VAT should go up, but whether VAT should exist at all? I have yet to see a coherent political logic as to why transactions should be taxed by government, especially as this sort of tax will hit the poor to some extent (I can’t say disproportionatly, because that would need figures to prove it).

13. Luis Enrique

Don,

oh yes I agree. I should have written “it’s no criticism of a reform of the income tax system ….” Decreasing a tax which the poorest people don’t pay, while increasing taxes which they do pay, is of course regressive.

To simply, that’s a good thing combined with a bad thing. I’m merely arguing that raising the income tax threshold is a good thing. It ought to be combined with tax increases for richer, not the poorer, but that doesn’t stop me think it’s a good thing in itself. Some of the criticism has been aimed at raising the income tax threshold itself, which is what I’m disagreeing with. Particularly the claim that it only helps the better off.

14. Sunder Katwala

Thank you to Don @10 – “People on benefits do pay tax, just not income tax. If you decrease a tax which the poorest people don’t pay, while increasing taxes which they do pay, you make them worse off. This strikes me as an entirely fair criticism”.

Does anybody really disagree with that? It is surely the central point.

When Lee @1 says “It was never about that anyway”, there has been an enormous amount of “taking the poor out of tax” rhetoric on this, and the IFS is pointing out the mismatch of the rhetoric and the proposal.

Yes, I agree this budget is not likely to be remotely progressive, all in – but the fact remains that the Lib Dems’ input as a junior coalition partner here has significantly softened the impact on working people with low incomes. I’m sure there are plenty of things in the budget that the Lib Dems governing alone would have done differently. Accusing a Tory-led coalition of failing to be progressive is a bit like accusing the Archbishop of Canterbury of failing to be secular.

Also: the implication appears to be that if only we’d all voted Labour the rich would have taken all of the burden of any tax increases, and there would have been no cuts to services and benefits for the poor. Really?

All three major parties agree either tax increases or cuts or both are required, whether now or (as Labour were saying pre-election) a few more months or a year down the line. I’m very sceptical as to whether New Labour’s cuts/tax increase budget (whenever it came) would have been much more progressive. While in government they certainly appeared to embrace all the standard right-wing narratives on taxation and benefits, apparently feeling it was unjust to “punish employment creators” and banging on unremittingly about feckless/fraudulent benefit claimants.

16. Sunder Katwala

@15

That applies if the LibDems don’t tell us the Tories have been progressive.

For things to be different under a Labour government, they would have to have gone for something closer to a 2-1 cuts to tax rises ratio, rather than 4-1, and of course having a different view about the risks to growth of the timing and depth of early cuts. Yes, I accept that you can argue that it is a difference of degree, but these are significant public policy decisions and real impacts that result.

And advocacy and pressure matters, as does some of the impact of Labour’s record.

Osborne had to spent £2 billion on the tax credits they always mock and knock at the end because they were under pressure to show they could be child poverty neutral on the taxation side at least (and, of course, the income tax threshold change isn’t particularly effective). That is because Labour set a child poverty goal, brought in tax credits to redistribute gradually over time, made a good deal of progress (if not enough, but more than in any other country in the same period, bar Mexico!) and publicly challenged the Tories to commit to it: doing that has constrained them from having the distributional impact of their 1980s budgets, at least in terms of taxation changes (if not spending) and so they now seek to make a virtue of that.

PeeJay @ 11

I think it’s therefore unfair to say that the poorest will be the most affected, the middle classes spend a high percentage of their incomes on clothing and other items on which VAT is paid.

But is that true though? VAT is fairly widespread and covers most items. I think you will find that poorer people pay a higher proportion of their income on VAT than middle and higher earners.

Jim,

“But is that true though? VAT is fairly widespread and covers most items. I think you will find that poorer people pay a higher proportion of their income on VAT than middle and higher earners.”

This may be true, but since VAT does not cover foodstuffs or children’s clothing (or books and newspapers) and is charged at a lower rate on fuel, this would suggest that the poor still are spending comparable amounts to the middle class or rich on non-staples (which appear to include clothing…). As I said above, I think this needs actual figures, not guess work.

Jim @ 17;

As I said, someone on £40 surely isn’t big on clothes or any other items on which VAT is paid. Those at the top spend a smaller percentage of their earnings in retail/shops/et c..

The Middle classes are the ones affected by the hike in VAT; petrol, clothes, furniture, DVDs, jewellery, modern commodities, these are the items the middle classes buy and not the poor.

If you earn £40 a week you’re really not left with much at the end of the week (and if you are, you’re obviously not eating properly). If you earn £500 a week you may spend £150 a week in accessories and other expendables, it’s the high street consumers that are hit hard.

20. Sunder Katwala

If you follow the PDF link in this post, it takes you to

“The effects of taxes and benefits on household income” from the Office for National Statistics. (PDF file) If you look at table 14 (appendix 1), it shows the income, taxes and benefit for all household decile groups. The figures are for 2007-08, which I understand to be the most recent available.
http://www.nextleft.org/2010/05/how-regressive-is-vat.html

PJ @ 19

But even if they have lower income, they still need to spend money on things like clothing furniture etc. £40 is not much money but the VAT they pay on even basic items like shoes is still a huge cost. The VAT on a 20 quid pair of shoes is 4 quid. That is 10% of your disopable income right there on one item! That ias on a shitty pair of shoes as well, so if you want a better pair of shoes and save money then your tax rate goes up.

Jim @ 21;

at the moment, on a £20 pair of shoes, £3.5 would be VAT. If the seller bears the cost, the price would stay the same for the consumer, if the seller decides that the consumer must bear the cost then the shoes will cost 50p more, hardly a big sacrifice to ask, is it? How many pairs of shoes do you buy in a year?

PJ @ 22

well that ’50p’ is not too much in itself, but it does mean that the poor are now carrying a bit mor of the tax burden now. Osbourn has increased this regressive tax and regressive tax means the poorer suffer.

BTW the supplier will never ‘bear’ the cost himself. What he means is that ‘someone’ will bear the cost. Which means he will be buying shoes for twenty quid, but the shop will be buying them for less or the quaility will be lower, or the shoes will end up cheaper. It means that the buyer will not get savings passed on.

Thinking back from when I was poor (not all so long ago!), it does seem that only a small proportion of the money spent was actually on VATable stuff. Transport and clothing seem to be the main ones.

I think the child benefit freeze is likely to be more pain to the poorest in society, to be frank.

Jim @ 23, of course the poor will bear a bit more of the tax burden but it really is minute. The more you consume the more the budget hits you and the poorest don’t tend to consume much.

Also, VAT isn’t a regressive tax, it’s a flat tax on consumption.

Sunder @20

Thanks. Kind of proves my point about what the hell does this tax do of any use (other than raise revenue), and why does anyone defend it?

PJ @ 22

I think you will find that VAT is a regressive tax. If you read the link from Sunder @ 20, you will see thatresearch will confirm this.

28. Shatterface

A flat tax is as regressive as a poll tax.

People should realise that this is not a short term measure to attack the deficit; this is part of a long term strategy to change the tax base of the Country. The Tories and Lib Dems are attempting to change society. The VAT hike is supposed to undermine, in the longer term, income tax, because of its progressive nature. This was started by Thatcher in the 1980’s, helped by Lawson and to a lesser extent by New Labour.

The first opportunity the Tories and Lib Dems get, they will cut income tax and further shift the balance between regressive and progressive taxation and will extend the gap between the rich and poor. Not only that, but it will render any hope of progressive politics still further remote.

To be brutually honest, you expect nothing more from the Tories, it is their job to kick the lungs out of the poorest in society. The Lib Dems, however really need to look at themselves in the mirror and ask themselves what they joined politics for.

30. Luis Enrique

is this true?

Just before the election this desire to raise the personal allowance was attacked from the left … as being an inefficient use of scarce resources. If you raise the personal allowance then all benefit: even the rich get to pay less tax! This has been neatly solved by reducing the amount you can earn before paying higher rate tax: those who do pay higher rate will not benefit at all.

the writer is Tim Worstall … I’m just interested to know whether they’ve lowered the higher rate band

(not, much to my regret, because of concerns about my own tax bill)

The poorest spend most of their income on essentials, the middle classes spend a higher percentage of their incomes on the items that will be hit by the increase in VAT.

So – with this statement we can now assume that those who are poor or on benefits no longer buy (which they didn’t anyway) 45″ plasma screen TV, sit at home drinking white lightning, smoking, scrounging off the benefit system (which almost all do not), don’t. With this budget we can see now that a few truths are coming out.

Glad tht little snippet has been put to bed.

32. Luis Enrique

I think you have to be a bit careful with this figures.

To see what I mean, imagine that a new tax is introduced that only rich households pay. Perhaps a “wealth” tax. Now think how those rich households will adjust their spending in response. It’s safe to assume they will reduce their expenditure on goods that attract VAT by some amount. Hence the “proportion of income going on VAT” will fall for rich households – which according to how the figures are being used here would make VAT look even more regressive. That would be misleading.

@PJ:

The basic level of benefit (i.e. the amount that the Govt thinks a person can live on per week) is approx £60, not £40. Carer’s allowance is less than this, at £50/week.

This amount of money has to cover not just food but also utilities, phone, clothes, shoes, cosmetics, cleaning products, furniture (including cutlery/crockery/pans), tools, transport, entertainment. All these things I would consider basic or essential for life and quality of life.

Utilities might have a 5% tax rate but phone bills do not. They will be going up to 20%. Rises in VAT on fuel will affect those who own their own cars but will also push up public transport prices. People still need to buy clothes, cosmetics, shoes etc even though they are poor. People still need pans to cook in even though they are poor. People still want to entertain themselves even though they are poor. The poorest people in the country may not buy *as many* individual items as middle class people, or buy the same quality (read, highly priced) items, but they still need to buy them. They will still need to buy them now at the same rate they bought them before the VAT increase, therefore, they will be spending more money on VAT now than before the increase. Hence people on a low income or benefits will now spend an even higher percentage of their income on VAT, seeing as their income will not be rising to compensate.

I disagree that this change for poor people will be ‘minute’ and I disagree that middle class people will be hit hardest. A middle class person can (for example) choose to buy one pair of jeans instead of two, whereas a poor person can’t choose to buy none instead of one, if their last pair is worn out or doesn’t fit any more.

That’s why the rise on VAT is unfair. It raises the price of things people can’t not buy. The result will be that more people will be pushed toward pay day loan shark companies and the like.

Sunder, the ONS paper cited by the Fabians and to which you have linked doesn’t quite support the headline that has been extracted from it.

The ONS paper has three definitions of income. Original income – income you earn, gross income – income including cash benefits and final income – income net of tax and benefits in kind. The 1 in 7/1 in 25 statistic is derived from comparing gross income to VAT expenditure rather than final income. This is surely daft. If you want to look at the impact of the tax system and whether it is progressive or not, you should surely be looking at final income. The question that you are then asking is, having taken account of all your income and all the tax you paid, what proportion of that total income went into this specific form of tax?

If you do that, it turns out that the poorest spend £1 in ten on VAT while the riches spend £1 in 17. That is certainly not progressive but it isn’t terrifically shocking.

Moreover, I think that there is something rather peculiar about the numbers themselves. Roughly 20% of all households live in social rented housing. I think that we can confidently assume therefore that the lowest decile household is living in social rented accommodation. I think I am also right in saying that the rents of approximately 65% of social tenancies are paid by HB. Certainly, if your gross household earned income is £1,954pa, then almost all of your social rent is likely to be paid by HB. Whereas that of a household in, say the fourth decile is neither in a social rented home nor in receipt of HB.

Yet the income from HB ascribed to the lowest decile is just £750 (the average annual social rent is around £3,900). Surely, if your rent is twice your earned income – it is getting paid by HB. And, at this level of income, a missing £3,150 is a pretty big number.Stranger still, according to the appendix, households at every decile of income including the top decile receive some payments in the form of HB.

I thought that this oddity might be addressed in the element of payments in kind ascribed to housing. It isn’t. If you live in a Council flat where you pay a rent of £75/week but whose market value might be, say £150,000 we would normally say that you are in receipt of a hefty benefit in kind. Not here, it is reported to be just £33 for the lowest decile household.

I am sure that this report is immensely valuable in its way and provides a sound basis for all sorts of useful calculations but it doesn’t seem to me to provide a robust basis for the sorts of claims that the fabians are making here.

35. Sunder Katwala

GeorgeV

Thanks. The “references” post gave gross income and disposable income. The convention is to use gross income, but I noted that
http://www.nextleft.org/2010/05/how-regressive-is-vat.html

This National Statistics “The effects of taxes and benefits on household income” is the best data available. When we have senior politicians (Kim Malthouse, Dan Hannan) saying “I don’t agree VAT is regressive” it is important to demonstrate the basic shape

I am not an expert on the financial data, but from having asked people about some aspects of this previously, my understanding is that some of what is happening particularly at the very bottom end of the income distribution is that we have aggregates and averages which combine different groups of people who have the lowest incomes this year. (eg, least well-off part-time workers, unemployed, some carers; but also students from different types of background, and others temporarily without an income for a range of reasons who might not be seen as poor). So the overlap of social housing and.or HB to private renters and the lowest decile will be significant but not complete.

Sunder,

A couple of points here. The ONS does not distinguish between gross and disposable income, it uses the three categories I noted.

The finding singled out of the data by the Fabians – that a household at the lowest decile of income spends £1 in every £7 on VAT just sounds wrong. 1/7 is 14.28%, VAT at that time was 17.5%. This finding would mean that a lowest decile household spends 82% of its income on items upon which VAT is levied at 17.5%.

That means food, fuel, children’s clothes and rent (because income includes HB don’t forget, so expenditure must also include rent payments) accounting for 18% of expenditure (or £30/week). Since we are talking about household rather than individual income and a social rent averages £75/week (per household), that seems wrong. Note also that the average household energy bill is a little over £1000pa or £20/week.

This brings me to your point about what type of households these are – I appreciate that the bottom decile household is not a true household – it is a household with the composite characteristics typical of households at that level. the data may indeed include households composed of the types of households you mention but that doesn’t detract from any of my points above. (Also, you seem to be confusing households and individuals) My central point is that no individual line of this study is robust enough to support the Fabians’ sound bite.

I sought to illustrate this using HB as an example but here is a different way of reporting the same data in that table. “23% of income in the poorest 10% of households is in the form of a retirement pension.” In fact, that is less misleading than what the fabians are saying. Here, it is quite clear that some households are pensioners – that their pension income is higher than this but the aggregate household at the lowest decile level receives this amount. You will note, however, that the statistic tells us nothing at all about what the level of pension income is in those households who do receive it.

The VAT figure is still stranger than the pension figure because it suggests that, if the average lowest decile household pays 14% of income on VAT, common sense dictates that, as with pension income, there must be some who pay higher and lower proportions. And yet, it is virtually impossible to pay a higher proportion of your income than that in VAT because the level of payment is so near to the level at which it is levied.

Does that make more sense?


Reactions: Twitter, blogs
  1. Richard Maddrell

    RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  2. Jonathan Taylor

    RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  3. Jon Harvey

    RT @Jon2aylor: RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  4. noname

    RT @Jon2aylor: RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa via @andrewspooner

  5. Liberal Conspiracy

    It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  6. karen birch

    RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  7. Laith Gibani

    RT @libcon It’s not progressive to cut income tax while raising VAT http://bit.ly/ca9k8E

  8. Jennifer O'Mahony

    Sunder Katwala, excellent as ever RT @libcon It’s not progressive to cut income tax while raising VAT http://bit.ly/ca9k8E

  9. Hannah Lazell

    RT @libcon It’s not progressive to cut income tax while raising VAT http://bit.ly/ca9k8E

  10. Damir Tankovic

    It's not progressive to cut income tax while raising VAT | Liberal … http://bit.ly/bmkVqS

  11. Mark Davids

    It's not progressive to cut income tax while raising VAT | Liberal …: In 2009-10, only 62% of the adult populati… http://bit.ly/bEsTL6

  12. First Income

    It's not progressive to cut income tax while raising VAT | Liberal … http://bit.ly/bEsTL6

  13. Trade Income

    It's not progressive to cut income tax while raising VAT | Liberal … http://bit.ly/bEsTL6

  14. Live blog: George Osborne prepares to unveil emergency budget | We-found-it

    […] Sunder Katwala at Liberal Conspiracy says upbringing the income ordered bounds does null to hold the rattling […]

  15. Zain Chaudhry

    Cutting income tax threshold not very progressive? http://bit.ly/cnGba4 #budget

  16. Newsroom News» Blog Archive » LIVE: Osborne raises VAT and cuts welfare

    […] Sunder Katwala at Liberal Conspiracy says raising the income tax threshold does nothing to help the very […]

  17. How can I make extra money until I can find a full time job? — Social Money Networking – Earn money fast

    […] It’s not progressive to cut income tax while raising VAT | Liberal Conspiracy […]

  18. Joanne Potter

    RT @libcon: It's not progressive to cut income tax while raising VAT http://bit.ly/9eCdMa

  19. The pinch we are feeling is not equal, thus unfair « Raincoat Optimism

    […] ignoring for a second the fact that VAT always hits the lowest paid in society what Osborne has forgotten is proportion and scale. If figure A earns £200 a week and the […]

  20. Lifestyle Key To MLM Sponsoring | ardyssbodymagiconline.com

    […] It's not progressive to cut income tax while raising VAT | Liberal … […]

  21. The Budget: to progressive what Kim Jong-il is to moderate {Carl Packman}} | Frost Magazine

    […] VAT always hits the lowest paid in society the hardest, though mostly what George has forgotten is proportion and scale. If figure A earns £200 a week and the government decides to take £10 more of that away, while figure B earns £2000 a week, and the government also decides to take £10, figure A feels more of a pinch in spite of the fact that both have contributed the same. […]

  22. Tom Miller

    Nto progressive to cut income tax and rise VAT / Lib Dems lose whole manifesto – http://is.gd/d0xZG

  23. Harriet R

    @SimonMagus @langtry_girl http://liberalconspiracy.org/2010/06/22/its-not-progressive-to-cut-income-tax-while-raising-vat/





Sorry, the comment form is closed at this time.