Now I'm grumpy.
Not only do I have to be up and alert on the morning after a bank holiday, but the BBC are giving air time away to a politician to lie.
Turn on the radio and we hear a labour politician being asked "What don't you like about the VAT rise?". His answer, paraphrased slightly, was:
1) Because they promised not to (but they and the lib dems were going to increase national insurance.
2) Because it's regressive
3) Because it's a tax on jobs
All this and the presenter didn't even query any of them. Now, I know the general election was last year and people might not rememebr it that well. So lets look at these claims.
1) The conservatives very clearly said (at some cost) "We have no plans to increase VAT". But they didn't promise it - they were amazingly clear on this.
2) Regressive. Define regressive. This term now seems to mean "any policy we don't like" - if it doesn't actually benefit the target groups a politician cares about, it's regressive. It's a meaningless word, and I'll show you why.
Lets say that you're going to increase tax in such a way that someone earning 10,000 a year pays an extra £10 but someone earning £30,000 pays £30 extra - that sounds progressive, right? Well.... no. You can still call it regressive. Or progressive.
Yes, the rich are paying more - but so are the poor. Indeed, if the £30K person paid £20 more then labour would be dancing up and down, it's regressive, regressive! Because as a percent, the rich are paying less of their income.
So to pass this test the poor both must pay less in absolute terms and as a percentage of income. Which makes virtually any cut you think of making regressive. Which is surprisingly difficult.
Oh, and the third point, about a tax on jobs? All taxes cost jobs. National Insurance is paid by both employers and employees. So, by definition, any increase is an actual tax on jobs.
VAT increases prices for everyone. So that's 2 actual lies and one meaningless statement - not even a follow up question.
An interview as hard of Jelly.
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3 comments:
Heard the same interview driving in this morning - I actually didn't think it was that bad.
Step one - politicians lie, obfuscate and generally spin everything they say. Neither the BBC nor anyone else is going to avoid/fix this.
"Tax on jobs" - utterly meaningless statement, but the conservatives started it at the general election. Still it seems fair to assume that a rise in VAT will encourage employers not to hire people as much, if not more than, an increase in National Insurance.
Ok so it wasn't a promise, but the implication was that they wouldn't increase VAT. Admittedly a lot of their suppositions changed once they got into power and discovered the state the country was in - so this is just labour trying to score points. That's what politicians do.
The regressive thing though - I have to kind of agree with them on that. Taking the definition of regressive as "harder on poorer individuals" (note inidividuals, not organisations) compare national insurance increase with VAT increase and individuals do suffer more and the poorer ones arguably more than the richer ones. They don't have the buffer of money to absorb the extra cost of *everything* (ok not food, but everything else). If you're just about making ends meet you don't care if your employer is paying more tax, but you do care if suddenly "just about managing" turns into "not managing".
Now if your talking businesses that's different - national insurance rises must be a bugger for small businesses, but they don't seem to be covered by the term "regressive".
What I liked about the interview though was for once it was just the labour representative getting away with saying "we would have left it for a year, we would have done it slower, we would have been gentler/kinder to 'the people'". He was forced to actually talk about his other reasoning - ok so two and a half out of three points were shaky as hell, but at least he wasn't just the usual broken record.
Right, 2 minute lunch reply
1) http://www.bbc.co.uk/news/business-12111507 - VAT might not be regressive. Even the BBC can't say for sure if it's one or the other.
2) "Tax on jobs" isn't a meaningless statement - well, used literally. NI is a tax paid only by employers for the people they employ.
I'd agree that it's now over used, in such a way that it becomes meaningless - such as the interview this morning - but this is the fault of idiot politicians who like a good catchphrase.
3) It wasn't a promise... it was a very guarded "we're not promising" - and they've done exactly what they promised. We can't complain about that.
4) I'm not sure I agree. By specifically increasing the costs of employers employing people, you decrease the chance that they'll hire more staff.
What's more "regressive" or "progressive" - creating an environment where it's cheaper to hire more people or taxing the creation of jobs?
Well, neither - it's not covered by the definition. The real question is, where do you place the tax burden - do you place it on everyone, as evenly as you can or focus on a smaller group - say, those evil employers?
I agree that it's a shame that VAT has to rise - but then, that's part of a bigger problem of tax rises/service cuts.
5) Indeed, hearing a whole paragraph before the interrupts was a refreshing change I have no problems with. I just think that the interviewer should then have asked a couple of pertinent questions after giving themselves enough rope to hang themselves with.
I take it then you didn't know that all politicians lie.
Always have done, always will.
Oh - cannot add comments via mobile when at work!
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