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New tax bombshell: 20% VAT - Times Online

A rise in VAT is looming whichever party wins the general election, as Labour and the Conservatives draw up plans to balance Britain's books.

Alistair Darling and George Osborne, the Shadow Chancellor, are both considering raising VAT to as high as 20 per cent -- the European average -- from the current rate of 17.5 per cent, The Times has learnt.

Doing so would raise an extra £13 billion a year at a time when financial markets are searching for signs that whoever takes power is serious about tackling Britain's £178 billion deficit.

Though Labour and the Tories have denied having any current plans to increase VAT, neither will rule it out and The Times understands a rise in the tax is being considered by both parties.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 12:01:58 PM EST
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Conservatives deny considering plan to hike VAT to 20 percent | Top News | Reuters

LONDON (Reuters) - The Conservative Party, favourite to win a national election to be held this year, rejected a newspaper report on Saturday which said it was considering raising the sales tax VAT to as high as 20 percent.

"We have absolutely no plans to increase VAT," a party spokesman told Reuters, without giving any further details.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 13th, 2010 at 12:50:25 PM EST
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Raising taxes on consumption hits the poor the hardest (relatively speaking). I guess that is why such a tax hike is considered more serious then raising taxes on high incomes or wealth.

This is not to say that there should be no taxes on consumption, only that the damage to the poor should be offset with raised subsidies and lowered income taxes on the lowest incomes. Such a package would then land the tax burden on the middle and rich segments who can better afford it, but I guess that would be unserious.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun Feb 14th, 2010 at 07:19:15 AM EST
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But didn't you know that the tax system is an unfair attack on the middle classes? get with the program!

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Feb 14th, 2010 at 09:14:07 AM EST
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