Shock as poor pay more on VAT than rich

31 October 2011

moneyWould you believe that our lovely coalition government are shafting the poorest 20% of UK households? It's shocking isn't it? When you've finished leaking all the surprise out of your body, we'll hit you with the The Poor Spend A Higher Proportion Of Their Disposable Income On VAT Than The Richest 20% whammy.

This is according to the Office for National Statistics said.

So basically, when Chancellor George Osborne announced the increase in his 2010 Emergency Budget was "a progressive tax", he was full of shit.

The ONS say that the poorest fifth spent 9.8% of their disposable income on goods while the richest fifth spent 5.3%. Basically, VAT is being hiked up on the thing being bought by the poorest households.

"This latest piece of research reinforces what is widely perceived to be the fundamental inequality at the heart of VAT: the poorer pay more of it relative to their incomes than the wealthy," said David Breger of HW Fisher & Company chartered accountants.

"It's clear that the Government needs to reconsider the full effect of VAT, which is inherently regressive."


TOPICS:   Banking   Investments   Tax   Government   Economy


  • will
    I love statistics, but bullshit ones like these mean nothing in the real world. They are easily misinterpreted, and cause the media to over-hype the 'problem' with incorrect titles like "Shock, as poor pay more on VAT than rich". Firstly, the poor do not pay more on VAT than rich. I don't know the numbers, but seriously? If you are on £10k/year and spend 9.8% of that on VAT goods, then you are spending £196/year on VAT. If you are rich, earning £100k a year (huge underestimate) and spending 5.3% on VAT-able goods, then you are spending £1060/year on VAT. Secondly, the fact that poor people are spending RELATIVELY more on VAT than the rich makes total sense. Poor people do not have enough money, and so 100% of their income is spent. Rich people will not be able to spend all of their income, and so a large chunk will go into savings, which offsets the proportion they spend on VAT relative to their earnings. Sorry, I love BW, but this was just boring nonsense. I would have rather read a story of you ripping into such government time/money wasting of generating such filthy statistics.
  • Tim
    The rich are penny pinching misers and hoard their money, fact. I know I am :) Still, as said, what they do spend generates more actual VAT, not to mention they're paying higher rates of tax, they spend big money on businesses and investments that generates income that's given to employees who spend and generate VAT, income tax, and generally keep the economy going. It's like the whole 1% / 99% bullshit. If you didn't have the 1%, the 99% wouldn't have jobs. Sure, even it all out. Then you have communism. Capitalism is the generation of wealth by the top that is distributed out to the masses. If that doesn't happen, it's a dictatorship. Still, all this stuff is what you get in periods like this. When it all picks up eventually then suddenly it's everyone for themselves and money talks.
  • Dick
    What is the definition of poor these days? Is it someone that cannot afford to buy a case for their iphone?
  • Sicknote
    The definition of poor is: someone who can afford all the Hi-definition channels on their Sky subscription package to play on their flat panel TV through their 5.1 surround system. Oh, while chain smoke about 60 fags or 'roll-ups' in one day while sitting on their unemployed arses griping about all the shite they're owed by us hard working numpties who can be bothered to pay tax!!!
  • The B.
    What an incredible piece of bullshit statistical reporting. Everyone pays 20% VAT, surprise, surprise, poor people have less disposable income therefore when they buy a telly it's a higher proportion of their earnings, well bugger me sideways with a badger, that's a shocker. Let's try those stats again but compare the percentage Income Tax the poor pay vs the rich? Now, does that balance the books a little?
  • klingelton
    don't forget about how they live in their paid for accomodation while driving a frigin beamer. I really don't understand this - how i can buy my own house, my own car yet someone who has someone else pay for everything can have nicer things than me. In this statement, I'm excluding the genuninely needy.
  • David
    Paying more by buying everything at BrightHouse probably doesn't help.
  • Pay B.
    [...] Shock as poor pay more on VAT than rich | BitterWallet Related Posts:Is VAT really a tax that hits the poor hardest? – Evening Standard Shock, [...]

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