Ed Balls wanting a tax cut for the rich

I have mentioned this before, but as I have seen yet another clip where labour point to Ed Balls’ 5 point plan for the economy with the temporary VAT cut always being the most cited part I thought I should say it again!

VAT is mainly charged on non-esential items, meaning that the 20% VAT rate is not on food or childrens clothes.

So, who benefits from cutting VAT to 15%, albeit temporarily? Someone who only spends kn the esentials of life will have close to zero benefit, a wealthy individual buying an £80,000 car would save over £3,300 in one purchase. They could save hundreds of pounds or more in restaurant bills over a year.

In short a temporary VAT cut to 15% could save wealthy individuals thousands of pounds and make no measurable difference to the poorest.

Do not misunderstand me, I believe lower taxes, including VAT would be good for the economy, but right now when Government is so expensive and has to be paid for you have be careful who are the real winners wnen you make changes, not just the average benefit.

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