On the 4th of January Value Added Tax (VAT) will go up in the UK. The sales tax will rise from 17.5% to 20%. It’s partly to pay off the advance that Labour gave us of course, when they temporarily lowered it to 15% to boost consumption a while back. It’s also to help cut the deficit, part of a national belt-tightening exercise.
The thing is, it’s a little ironic hearing the ‘we’re all in this together’ rhetoric from the coalition government. VAT is not a progressive form of taxation, but that’s a barely relevant debate when you consider how little tax the richest members of society actually pay.
This government has put lots of effort into catching ‘benefits cheats’, and almost none into catching tax cheats, despite the fact that tax dodging robs the treasury of 15 times more income than false benefits claims.
Why the undue focus on the smaller problem? Perhaps it’s because some front-benchers, including George Osborne himself, may be benefitting from tax loopholes. We certainly know that several prominent Conservative peers have off-shored their taxes – all legal of course, but still detrimental to the economy. Reforming the laws that allow millionaires to escape taxation would bring in far more than clamping down on those who falsely claim benefits.
To highlight this hypocrisy, 38Degrees would like to place adverts in the papers on the 4th January, something like this charming depiction of George Osborne as ‘the artful dodger’. They need £20,000 to do it. If you’d like to help, click on through to donate.
The Earthbound Report 