27,11,08, Just a Question

I read on Google today that the change in VAT is allegedly bringing about a price war between the big retailers. Presumably implying that the 2p change in VAT is going to make that much difference. It seems so contrary to what I had expected. About a mile and a half from where I live there is a row of small shops which are frequented by those living nearby, and so small and so fully stocked, that more than four people within the shop at any one time make moving about like a chess game. It struck me when I was in it that it would take hours for the shopkeeper to re-price all the goods as a result of the 2p reduction. This then made me think about the differential between those at the bottom of the scale, who have about 10,000 a year to spend, which will provide them with a saving of about four pounds a week if they spend it all. While at the other end of the scale, with people earning 10 million a year, of which they get, say 6 million after tax, I strongly suspect that most of that will be going abroad to a tax haven, instead of the VAT on six million generating more trade in this country, or oiling the wheels of the banks. What happens between is a matter of scale. I just wonder if I am the only person who thinks along these lines? The government certainly doesn’t! My Dutch friend Jan tells me VAT in Holland is 19%.

Leave a comment

Your email address will not be published. Required fields are marked *