The Thick of It

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Tuesday, November 01, 2011

VAT hits the poorest hardest

The Tories and their Lib Dem pals would never admit it, but we all know that VAT costs poorer people harder than rich. As a flat tax, paying the same fee as a sales tax will always be a greater portion of a lower paid person's income than someone with higher earnings.

George Eaton at the New Statesman aptly demonstrates:


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Spending patterns differ between people with different earnings. That was the riposte I received from both Tories and Lib Dems when debating this after the election. Their smugness shielded them from the reality.

Eaton's analysis of the ONS work shows that the poorest 20% of earners are spending the equivalent of 10% on their income on VAT. Thise in the top 20% pay just 6%.

The Tories are a risk you cannot afford. They cost you more. We're not all in this together.

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