Labour tax cuts ?

[Uncle C]

Am I going mad. Everyone is talking about a 2.5% reduction in prices.

Surely a product costing £100 + 17.5%VAT = £117.5

Now costs £100 + 15%VAT = £115

This is a £2.50 reduction on £117.5 or just over 2.1% reduction.

 

[beorhthelm]

Notice the Tories keep booing and saying how poor Labour are, even though they ARE taking the "fiscal responsibility" that they accused them of not taking. It's the tories only response, just to cry foul for WHATEVER Labour do.

have to agree, the only thing worse than the Labour government policy is that the Tories dont even have one. all very nice having a progressive leader (which i think he wants to and could be) but he needs to start f***ing presenting something.

 

[skipper734]

Yes, but the £2 odd that you just saved, has been more than taken back by Brown in the N.I. increase. I think on the street it's called the shell trick.

 

[Freddie Goodwin.]

Another problem to be faced is the 'tax gap' for the self employed. They pay tax on their profits many months after they made the money so, if they've not wisely put it away or have had to use those funds to get them through, they will struggle to pay when the time is due.

Also, the lesser earnings of the self employed will be feeding into the system in about 12 months time,

The 'payment on account' method for the self employed works on the assumption their profits will go up year on year. If you are self employed, and profits have gone down, then you need to do your return as soon as possible, in the new tax year, rather than wait for the following Jan 31st deadline.

 

[Gully]

Shrewd, and should, are the operative words where credit is concerned.
Therefore, people who accumulate debt by bad thinking, deserve all they get from that.

Shrewd people don't get into debt in the first place, they only borrow money to pay for something likely to increase in value over time (such as a house), they save for everything else and pay for it when they can afford to...thus banking interest earned on their savings, rather than paying it out at some outrageous rate of APR.

 

[BensGrandad]

I wonder how many pubs and clubs etc will knock off the 2.5% VAT. .

Just read the trade paper on line and it appears that the Chancellor has raised the liquor duty by 2.5% to offset the reduced VAT so beer etc will not be cheaper.

 

[Skint Gull]

Shrewd people don't get into debt in the first place, they only borrow money to pay for something likely to increase in value over time (such as a house), they save for everything else and pay for it when they can afford to...thus banking interest earned on their savings, rather than paying it out at some outrageous rate of APR.

I take it you drive a classic car then because anything else will depreciate in value? God the self righteous 'i've never owed anyone a penny in my life' brigade really get on my tits.


The problem we're in lies partially with the people who took credit they could never reasonably afford, and mostly with the dumbass banks who gave the credit to these people.

This 'solution' is not going to get us out of this mess.

Anyone who's being a bit careful what they use their money for is not suddenly going to say: Oooh, that plasma i want is down from £595 to £582, I must go and get it

Then to add on to peoples NI rates for 5 years to cover it, am I going mad? Can someone confirm if i'm missing something?



If I earn 20k, after tax and NI it's about 15.5k.

I then take off my rent, rates, utilities and car insurance which will not see a reduction in VAT and I have 10k left.

Even if I spend all of that on VAT listed items (which is not possible anyway as most foods are not VAT listed) I will save a WHOPPING £225 per year.

It appears (please correct me if I'm wrong) I will be paying 0.5% extra in NI on my 20k for the next 5 years to pay for one year of saving £225.

Extra £100 p/a in NI over 5 years is £500.

Am I getting this wrong somewhere or are we getting nailed here?

 

[skipper734]

Shafted, nailed, scammed, bamboozled etc. I read one of those photocopied office hand rounds (before e mails) that showed that if you earned say £100 it all eventualy disappeared in tax.

 

[The Oldman]

As an old 'un I would just like to say that in my lifetime one party always seems to end up getting the country's finances into a mess and the other has to sort it out. I can't stand the smug Tories but credit (see what I have done there) where credit is due.

 

[sten_super]

The whole PBR is complete nonsense, while the government sits on its hands and lets the banks continue to call the shots. The forecast for the economy he came up with is a complete fallacy. I'd love to know where 0.75% of 'economic' (whatever that means) growth is going to come from this year, given that output grew by 0.3% in Q1, 0.0% in Q2 and is going to be negative in Q3 and Q4. His forecast for 2009 is also far too optimistic, and the likelihood of growth of 2% in 2010 is pretty slim.

The continued debt culture in this country has been led by the government; if Darling manages to stick to his budget, total government debt will be 57% of GDP by 2011. Complete lunacy.

The VAT reduction is, as others have said, a complete non-starter. It looks good, but will achieve nothing. What we are experiencing is a correction; people were overspending, using money they didn't have. At some point this trend was going to have to be reversed. The laughable thing of course is that he hasn't actually even cut taxes in the long term; the increase in NI means we will be taxed MORE than before (from 2011 at least).

The only good news is that he has at least had the decency to put some relief in place for SMEs.

At the same time, the banks continue to run the show. Yesterday we saw another bank in the US needing rescue. How much money are these governments willing to put into these horribly mismanaged and fundamentally screwed businesses?

Can you tell I'm angry?

 

[London Calling]

The Conservative alternative is

" "?

?

??

 

[Brighton Breezy]

A lot of the people moaning about the fact the Government should have protected us against this are the same people who took out mortgages they could not afford and got maxed up to the eyeballson credit.

 

[Papa Lazarou]

A lot of the people moaning about the fact the Government should have protected us against this are the same people who took out mortgages they could not afford and got maxed up to the eyeballson credit.

Really? how do you know this? Is this a published fact?

 

[Chicken Run]

All very nice but i'll assume that duty on Alchohol and Baccky will rise off setting any saving made with the Vat reduction!

 

[Brighton Breezy]

A generalisation I know but there are a lot of people who have to take some responsibility for being all too happy to live their lives on credit they could not really afford.

 

[sten_super]

The Conservative alternative is

" "?

?

??

I don't know, and I don't particularly care. I would have the same rant if the Conservatives were presenting this as the party in power. The onus is on Labour, as the people currently in charge, to come up with a solution, or at least DO SOMETHING, rather than sitting on their hands.

If the government were serious about improving the position of the man on the street, they would cut income tax, allow a correction in the savings ratio and then watch people increase spending. But they aren't; they are trying to send 'signals' to increase spending, while still allowing them to continue to raise taxes and increase government spending.

 

[Papa Lazarou]

A generalisation I know but there are a lot of people who have to take some responsibility for being all too happy to live their lives on credit they could not really afford.

Yup - agreed.

http://news.bbc.co.uk/1/hi/business/7747757.stm

This makes dire reading, especially as it points out that we will be hit harded than most other nations, and

exposed other vulnerabilities, or by severe housing downturns

 

[Beach Hut]

A generalisation I know but there are a lot of people who have to take some responsibility for being all too happy to live their lives on credit they could not really afford.

To a certain extent however the banks have not helped this by offering very cheap credit and home owners deluding themselves into believing they were well off given the value of their house and the mortgage on it.

 

[Papa Lazarou]

I don't know, and I don't particularly care. I would have the same rant if the Conservatives were presenting this as the party in power. The onus is on Labour, as the people currently in charge, to come up with a solution, or at least DO SOMETHING, rather than sitting on their hands.

If the government were serious about improving the position of the man on the street, they would cut income tax, allow a correction in the savings ratio and then watch people increase spending. But they aren't; they are trying to send 'signals' to increase spending, while still allowing them to continue to raise taxes and increase government spending.

I blame Thatcher... b*tch.

 

[Brighton Breezy]

To a certain extent however the banks have not helped this by offering very cheap credit and home owners deluding themselves into believing they were well off given the value of their house and the mortgage on it.

Yes the banks were dishing out mortgage deals left, right and centre but people didn't have to take them.

I got on the property ladder two years ago. I could have got a higher mortgage and a nicer, bigger place but the repayments would have been far more demanding so I got one I knew I could afford.

Don't see why others couldn't do the same.