Why Are The Recent Tax Cuts Described As "Unfunded" In The Media?

[Kardashev]

Surely the money that is not taken in tax will largely be spent on things that have VAT, duty etc on them and therefore end up in the treasury anyway.

[youngmafbog]

That doesnt play to the Agenda Kard.

[bobbinwales]

But vat will only be small percentage of the amount given

[youngmafbog]

Not just VAT though is it.

And VAT is 20% so not that small.

[THECORBYLOON]

If the savings were spent only on food, there would be no VAT going to the Treasury.

[Peter Pedant]

because they are ! ( unfunded) haw haw haw

as the great leddy might say - we reach into our purse ( = the treasury) and we want this toy
and if you dont have the lu-lu ( = moolah, money)
then you have to borrow it from mummy or Papa ( Financiers, CHinese or both).
and mummu or papa may say - do you really need

Spenging your way out of a recession is I agree mainstream Keynes

[bobbinwales]

Yes 20%... but not on food which some are doing without children's clothes and 5% on energy for those who been cutting g back or using it to pay arrears or fund increases

[ToraToraTora]

It suits the 5C agenda, VAT alone is 20% so that's the same as income tax, then there is the huge "Duty" on all sorts of things like petrol, beer etc. I wouldn't be surprised if the tax take actually went up. Labour and the left wing media love to conveniently ignore indirect tax.

[FatticusInch]

ToraToraTora
//It suits the 5C agenda, VAT alone is 20% so that's the same as income tax, then there is the huge "Duty" on all sorts of things like petrol, beer etc. I wouldn't be surprised if the tax take actually went up. Labour and the left wing media love to conveniently ignore indirect tax.//

…….whilst conveniently ignoring the recent ‘fiscal event’ that has proved utterly catastrophic for the economy and mortgages, not to mention irreparable damage to the PM, her Chancellor and their Party.
Yet some are moaning about ‘spin’? PMSL

[ToraToraTora]

Let's take beer, for a 4% pint for example, that's 19.08p for each % of alcohol so 76.32p. We add VAT to that so 91.584. Now we add VAT to the base cost of a pint say £2.50 so that gives us £3 + the 91.58 so £3.91. So out of £3.91 we are paying 50p + 92p = £1.42, so out of £3.91 we are paying £1.42 tax that's 36%, a lot more than income tax. That's why direct tax is a very poor way to collect revenue.

[Old_Geezer]

I am no economic expert, but I feel ithas to be wishful thinking to hope that unfair indirect taxation on spending will increase sufficiently to cover the loss of fairer direct taxation on income; especially when times are hard and all, particularly the poorer section of the community, is looking really hard at what spending is necessary and what can be avoided. By the reckoning that all is going to be covered one is led to the conclusion that one can remove the fairer direct taxation altogether, with complete impunity; which can't be right.

[youngmafbog]

TTT, the problem is many on here are economically illiterate and just rant based on what they have been told by Sky or TwitFace etc.

They also conveniently miss that all currencies are down against the Dollar that is massively over valued and wont do the USA much good long term as their exports will suffer.

[bobbinwales]

Err ...no TTT. Give back £100 in tax cuts.... rhat gets spent....a fraction maybe 15% comes back as vat. Yes okay some gets respect so that's 15% of that..but its not fully funded , nowhere near

[Old_Geezer]

No wonder pubs are closing at the rate they are.

[tomus42]

Perhaps the markets haven't realised this. If someone could get on the phone to the city and point this out the economy could still be saved!

[bobbinwales]

The markets don't think its fully funded and that's what matters at the moment....see the pound and shares

[youngmafbog]

//If the savings were spent only on food, there would be no VAT going to the Treasury.//

But they wont be will they. For the poorest in society maybe but we still have plenty of booze, gas and petrol being bought which is where many wold perhaps spend a bit extra they have. And that is way more than 20% and would cover the few spending on food.

[youngmafbog]

//Perhaps the markets haven't realised this.//

They have and are playing it to their advantage. Thats what the City do, they dont care about you or I just making a buck.

[youngmafbog]

//The markets don't think its fully funded and that's what matters at the moment//

That is a part of it but mainly they are spooked by a change in direction. The City doesnt like change unless it is control of it.

[youngmafbog]

The FT is a bit lefty, but I thought you all might read it so:

https://www.ft.com/content/38ca6bdd-068e-4fe2-a684-484a5725ad8d

[tomus42]

Gawd knows why any Tories are defending her.

She's trashed the conservatives reputation for being a safe pair of hands for the economy overnight, perhaps permanently.

If I was a Tory supporter I'd be a bit miffed about that.