Britain's VAT Rise Will Savage Poor


The Tory's latest wheeze to cut the deficit on the backs of the poor comes in the guise of raised VAT (value added tax, or 'sales tax'). The rate is being increased from 17.5% to 20%, and according to most studies, it will disproportionately hit the poor.

Taxes on consumption are almost always unfair (unless on luxury items) because people pay the exact same tax regardless of their income. A millionaire would probably be mildly annoyed at the increase in the price of gas, but a person making minimum wage may not be able to drive to work.

The VAT rise is another example of the Tory government's restructuring of the economy to protect the rich and smash the poor. It's a classic example of 'shock doctrine' economics, where the deficit is used as an excuse to radically redefine the role of the state. While big businesses receive tax cuts, the poor and what is left of the middle classes end up covering the debt through increased consumption taxes and cuts to social services - all of which do not effect the rich.

I've made a bet with a conservative friend of mine that the radical steps taken by the Tory government will cause a double dip recession, instigate a prolonged bout of stagflation, and lead to serious social unrest. While I don't want to win my bet, it looks like I might be able to call in my winnings sooner rather than later.