Originally Posted by Don

VAT is set to rise under the new coalition government, according to a BBC survey of influential economists.

Increasing the VAT from 17% to 20% by the end of 2011 is predicted by 24 of 35 independent economic advisers to the Treasury. A 20% rate would yield approximately 11.5 billion pounds.

I find this interesting as instituting a VAT in the U.S. is currently getting some discussion. Typical, 'sales tax' structure in the U.S. consists of a combination of city, county and state taxes with the addition of some federal luxury taxes. Presently, in my location we pay 8 to 8.5% (depending on which city I purchase in) or 4% for purchases made outside the city and in the county. I would foresee a VAT in addition to what we currently pay with a possible slow phase in of a total VAT. The advantage, from a taxpayers perspective, is that we get to vote on increases and decreases (yeah right) to sales taxes whereas a national VAT would be mandated by congress.

BBC News - VAT 'will rise' under coalition government

It wouldn't surprise me in the slightest if VAT were to rise to 20% - after all, we have to try to claw back the best part of a trillion pounds - but I wouldn't care to be the person who has to estimate the effects of increased prices in the shops versus a consequential drop in demand of some non-essential goods and services, especially if we're not moving well clear of the bottom of the recession when it's introduced. At least in theory VAT rises will have minimal impact on the bottom sector of the wage earning public, where things like food, rent and children's clothing are largely zero rated whilst utilities are rated at just 5%.

Whether it's just me reading more into what's said here than I should I don't know, however a recent report from the Telegraph seems to hint at some sort of labour government fudging of the figures to hide the true extent of our economic problems. Could it be that they'd hoped this would have gone unnoticed until after the election?

Originally Posted by Jasino341

Whether it's just me reading more into what's said here than I should I don't know, however a recent report from the Telegraph seems to hint at some sort of labour government fudging of the figures to hide the true extent of our economic problems. Could it be that they'd hoped this would have gone unnoticed until after the election?

There have been several hints at figure-fudging over the state of the economy made at a couple of Institute of Directors meetings I've been to in the last few months, and it wouldn't surprise me in the slightest if it was true, but it's difficult to separate out fact from fiction at times as I doubt there's anyone who knows the real sums involved from all sources. I've already heard from my ex-wife, who's a quite senior civil servant these days, that there's a huge distortion in the way that many statistics, particularly with respect to things like unemployment and benefits, are presented to the public by the government, who think that the various ' seasonal and economic adjustments' and changing benchmarks will fool people.