The Mudcat Café TM
Thread #161908 Message #3851428
Posted By: Nigel Parsons
20-Apr-17 - 09:57 AM
Thread Name: BS: UK General Election
Subject: RE: BS: UK General Election
We all need food, part of the cost of that food is the cost of transportation, fuel costs. That fuel is taxed and we as individuals all pay for that cost. If someone earns £100 a week or £10,000 a week we are all taxed the same.
VAT on items is non variable for instance, many other examples could be given.
Not strictly true, nor accurate.
VAT is not non-variable. It can be (in UK) at rates of 20%, 5%, or Zero%. (Exempt VAT is another matter)
To a great extent VAT replaced purchase tax, or luxury tax. As such basic foodstuffs are zero-rated for VAT, so you don't pay VAT on them. Nor do you pay VAT on the transportation costs on that food.
Luxuries still attract VAT, and one would expect the poorest paid to be spending a higher percentage of their disposable income on necessities, rather than luxuries. So even the impact of VAT will be greater on the 'better off'.