Poorest people spend more on VAT than richest.

[Supertramp]

It's because it fits with agenda of the Rich get tax cuts and the poor have to pay. Why don't they say how much cold hard cash they paid in VAT?

[Cyclone]

The significant change over the period was the introduction of VAT on domestic fuel in April 1994.

Since it has been levied at a reduced rate of 5.0 per cent since September 1997 (and 8.0 per cent

between April 1994 and August 1997) it accounted for less than 3 per cent of average household VAT in 2009/10.

 

I'd agree with anyone saying that it shouldn't be charged on domestic fuel though.

[Cyclone]

Interesting that the BBC missed this though

 

The increase between 1986 and 2009/10, in the proportion of average household expenditure on

VATable items, suggests that there were changes in the composition of household spending over

the period. In particular, poorer households in 1986 spent a smaller proportion of their expenditure,

than poorer households in 2009/10, on discretionary items which attracted VAT. For example, after

taking into account changes in prices, the poorest fifth of households spent, on average, around

250 per cent more on new cars, holidays abroad, meals out, audio/visual goods (including TVs) and

photographic equipment combined, in 2009/10 than in 1986. This is compared with an increase of

20 per cent for the richest households.

 

Let me help the BBC out.

 

The poor are now richer than they were 15 years ago and able to spend more on luxury goods which attract VAT.

[Conrod]

Perhaps this thread should be renamed:

 

"Why do some people on low incomes spend too much of their money on booze and fags when they should be concentrating on food and sensible VAT-free essential purchases for their families?".

 

Or

"Shock horror, people who earn more have more cash left at the end of the month if they don't spend it all".

[gnvqsos]

http://www.bbc.co.uk/news/business-15519727

 

 

 

 

 

The likes of Cyclone, Conrod et al. on here also argue that VAT is a progressive tax. Yet evidence coming out now, proves this now to be to the contrary.

 

In which case their economic awareness is sub-GCSE level

[ampersand]

Leaving aside the fact that the title of the post could have been written by a Daily Express headline writer in that the OP doesn't actually say what the title says, VAT is, always was, and always will be a regressive tax.

 

If I buy something VATable at £12, £2 of my income has been spent on VAT - if my income is £200, that is 1% - if my income is £100 it is 2% - the lower my income the higher the proportion I am spending on tax - what is there not to understand?

[gnvqsos]

Leaving aside the fact that the title of the post could have been written by a Daily Express headline writer in that the OP doesn't actually say what the title says, VAT is, always was, and always will be a regressive tax.

 

If I buy something VATable at £12, £2 of my income has been spent on VAT - if my income is £200, that is 1% - if my income is £100 it is 2% - the lower my income the higher the proportion I am spending on tax - what is there not to understand?

 

You have made it crystal clear-excellent.

[alchresearch]

So poor people pay more VAT. Richer people (ie on 30K a year or more) pay more in income tax. Even richer people spend more on road tax and fuel for their gas guzzlers. Or is it a case of "tough, they can afford it"?

[mj.scuba]

The poorer people are spending more of their money on VAT accruing items as a % of income.

 

Clearly too many of the basics attract VAT.

 

Fags and beer as the most obvious example.

 

Fags and beer are not basics.

[chem1st]

Fags and beer are not basics.

 

Of course they are. This is Yorkshire.