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Comments
Ok point taken, perhaps stealth tax in this situation was a bit strong, but you have to admit it is a very good way of raising extra tax without really advertising the fact.
I disagree, I don't think VAT is an obvious tax at all. The more you know about it, the less you know about it.
Take the following list, and tell me which items are taxable and which items are not (bearing in mind that this is a tax for "luxury items":
domestic heating fuel
mobility aids for the elderly
car seats, restraints and harnesses for children
female sanitary products and maternity pads
aircraft repair and maintenance
printing
magazines and newspapers
books
flapjacks
cereal bars
And that's before you get into the really bizarre stuff. Fruit covered in toffee, honey, chocolate or nuts is taxed at 20%, but a toffee apple (or an apple covered in chocolate or nuts) is taxed at 0%- but only if it is on a stick. A bourbon chocolate biscuit is taxed at 0% yet a chocolate digestive biscuit is taxed at 20%.
I didn't think that the economics of it were quite that straightforward. The idea is "[to stop] selling drinks for less than the tax paid on them". Now my maths and economics is weak, but that suggests that tax isn't directly proportionate to price - it sounds like you could currently sell a bottle of beer for 30p, yet be forced to pay 45p tax. Ergo, under the new laws you'd be forced to sell the bottle for 45p: no more tax would be raised.
I'm fully willing to accept I've got the concept all back-to-front!
Ok i am backing down here, i did'nt fully understand the concept.
I will have to find another subject to knock those tory robbers :d