Tuesday, November 25, 2008

Trixy is confused

I know they're politicians and thus many find it quite difficult to tell the truth when they think it's going to cost them votes. Actually, scrub the last part of that sentence: many find it quite difficult to tell the truth but, given their constant battering of bullshit stats on how education has 'improved'*, do they not think it's an anomaly that we wouldn't therefore be able to do basic addition and subtraction?

this spending will help put money into the economy in the coming months.
But to prevent the recession deepening, we also need to take action to put money into the economy immediately.
I have looked at a range of ways which might achieve this.
I have decided that the best and fairest approach is a measure which will help everyone.
To deliver a much-needed extra injection of spending into the economy right now.
I therefore propose to cut VAT from 17.5 to 15 per cent until the end of next year.
This VAT reduction will come into effect next Monday on December 1st.

Okay.
But wait:
The reduction in VAT lowers the amount of tax paid on tobacco, alcohol and petrol.
In addition, petrol prices have come down, by 7 pence a litre last month alone.
So I will offset the VAT reduction, by increasing all these duties by an amount which should keep the overall cost to consumers the same this year.

Okay, so keep milking the goods with inelastic demand and raise duty by 2.5%? Or just not cut VAT on those things? Oh...
5.111 The Government will increase the overall duty on alcohol from 1 December so that the total VAT and duty remain broadly unchanged following the reduction in VAT to 15 per cent. The increase in duty will be maintained when the VAT rate is returned to 17.5 per cent in January 2010.
5.112 Maintaining high levels of tax on tobacco helps to reduce overall tobacco consumption. Tobacco duties will, therefore, be increased from 6pm on 24 November to ensure that the overall level of taxation on tobacco remains broadly unchanged following the reduction in VAT to 15 per cent. The increase in duty will be maintained when the VAT rate is returned to 17.5 per cent in January 2010.

I am genuinely bemused by this. Given that the duty on tobacco and alcohol went up last night and VAT is not changing until Monday, the 4% increase on tobacco is a 4% increase on the current price which is going to be more than a 2.5% cut.

For example:
Say fags cost £5.97 then a 4% increase is an increase of 23.88p bringing those cigarettes up to 620.88p

Now, as tobacco went up last night and VAT isn't being reduced until Monday, that means the 2.5% will be on the new price of 620.88p This will mean a reduction of 15.25p. This makes the new price, if the costs and profit margins of the retailer are kept the same, of 8.63p per packet which is only just under a 1.5% increase on the original price.

So how is that keeping the price the same?

Or is it just that it's another tax rise based on the fact that ZaNu Labour hate anyone having a choice, especially on activities they disapprove of (but should probably try so they chill the bugger out)?

If it's the latter then combined with the downright dangerous ID card proposals (I'm not bloody getting one: I didn't when I lived in Belgium and I shan't here) then may I suggest, should you not be aware of how we simply cannot have another Labour government if we are to exist as a free peoples, that should you debate voting Labour it might be better off stapling your hand to an immovable surface instead of doing so.

Just to keep us safe.

*for 'improved' read 'had money chucked at it

2 comments:

The Great Simpleton said...

Trixy,

That bad tooth is distracting you, or maybe you fell for the 3 card trick. The answer lies in this bit [my amphasis]:

5.111 The Government will increase the overall duty on alcohol from 1 December so that the total VAT and duty remain broadly unchanged following the reduction in VAT to 15 per cent."

Like the politician he is he announces the bits you want to hear and while you brain is relaxing and distracted he slips in the bit he doesn't want you to think about.

If you had been allowed to pay attention there is no way you would have thought "broadly" meant slightly lower or exactly the same, would you?

James Higham said...

It's possibly past the point of no return, Trixy.