Make stuff cost more, people will buy less? Poll

earpiece

The threat of a VAT increase in next months budget, what effect will it have?
A) No effect
Decrease retail sales
C) Feed the black market
D) Bring in rakes of cash for the state

partyatmygaff

More people buying online from the rest of Europe is what sounds most likely.

Gee Bag

The answer is B and C and D.

I love these reverse multiple choice questions with only one wrong answer.

Ghandee

earpiece wrote: »

The threat of a VAT increase in next months budget, what effect will it have?
A) No effect
Decrease retail sales
C) Feed the black market
D) Bring in rakes of cash for the state

E. The ah, sure it'll be grand, moan a lot and do nothing about it. Option.

Solnskaya

It won't bring in a rake of cash for the government, because as prices (and inflation) increase, people will spend less. Most likely, it will be revenue neutral, but it will add further sugar into the fuel tank of the economy, hastening the stall, bang and wallop. Usual dimness from a dim govt. You can't tax your way out of a recession, you need to stimulate spending and economic activity by freeing up the market through lower taxes and slashing red-tape. Good one Enda, you probably made an average teacher, hence you are a crap economic leader.

Where To

won't make a blind bit of difference.

marketty

Im not happy about it, but it will bring in more money. I understand the arguments about people spending less, going up north, buying online from abroad, black market etc. but what makes this different from taxes on cigs, fuel, alcohol etc is that it's on everything, you really cannot get away from vat. Yeah if I was buying a new laptop or other high value item I'd buy online and save a packet but the reality is i'm so skint anyway I won't be buying high value items as much as I used to, and the government knows this. So they hit you with vat, which gets you every time you do the weekly shop, or buy any day to day items

the keen edge

Gee Bag wrote: »

The answer is B and C and D.

I love these reverse multiple choice questions with only one wrong answer.

They make learning fun, and easy.

earpiece

I'm self employed, and in the last year about 75% of my customers want to pay me cash to save that 21% in VAT..... am I about to see an increase if the rate goes up. I'd say so. This is the black market.

sgb

where do i go from here wrote: »

won't make a blind bit of difference.

Yes I think you are right, an increased tax take has to come from somewhere

R.D. aka MR.D

Working in retail i already see the difference a few euros can make to whether people buy something or not.


Who makes these decisions!!!!!!!!!!!!!!!!!!!!!!

Biggins

R.D. aka MR.D wrote: »

Who makes these decisions!!!!!!!!!!!!!!!!!!!!!!

Lately? France and Germany some say! Others say Brussels or the IMF, etc.

the keen edge

R.D. aka MR.D wrote: »

Working in retail i already see the difference a few euros can make to whether people buy something or not.


Who makes these decisions!!!!!!!!!!!!!!!!!!!!!!

The Germans.

Mountainsandh

I used to buy an awful lot online from Europe and US when things were booming here (simply refused to pay the prices here), then with the onset of the recession, I found myself buying more and more in Ireland, since prices went down to a more reasonable level. If prices go back up here, I'm simply going to switch back to buying online.
Also, black market is rife is my area, I'm sure this'll get much worse and contaminate products or services not normally affected.

sgb

^^

The black market is going to be the booming economy in 2012

ejmaztec

R.D. aka MR.D wrote: »

Working in retail i already see the difference a few euros can make to whether people buy something or not.


Who makes these decisions!!!!!!!!!!!!!!!!!!!!!!

A bunch of fucking morons who earn so much money, that they won't notice the extra that they'll have to pay for goods and services.

The rest of us can go fuck ourselves.

bnt

In economic theory this question is filed under "price elasticity". Whether or not demand falls after a price increase depends on the item in question - how expensive it is related to income, whether there are substitutes, etc.

Gunmonkey

E - Make people buy more Atari Jaguars

galwayrush

Gunmonkey wrote: »

E - Make people buy more Atari Jaguars

For cash.:pac:

[Jackass]

It will do all 3 of the things you mention.

Retail sales will fall, the black market will sell more (particularly on vice goods) and the state will bring in a lot more money.

The problem with this is not the change in VAT rate, in lead up to election this was clearly stated in the programme for Government, the problem is the timing, right before the biggest 4 retail weeks of the year, that is why the "leak" is such a disastor.

But no, the sky will not fall in, there will not be 10 hour car drives worth of traffic to the north (pending the next couple of weeks and the inevitable Irish over reaction), but it will settle and will be part of multiple strategies to stabalise this country and will be reversed when the books are back in the black in time for the next FF Government to come in to power and have another 10 years to try their best to see how much they can get away with.

Remember people, all tough decisions made now are stupid. This Government made this error, and everything they do is wrong. Closet FF voters, have your polling cards at the ready, it'll be safe to come out next general election, so no need to vote for labour this time.

ilovesleep

My wage took a hit at the end of the summer. I'm coming from a good position as in I have no debts and no loans and I'm finding it very difficult. I haven't been shopping for anything since July and I need new shoes. I haven't done a grocery shop since september and just living of cereal, milk, tea and soup. I really see this VAT increase killing off retail leading to more unemployment. We're going to be taxed into a default.

LighterGuy

See this rise to 23%,
It aint going to hurt any business. They'll just pass it on to the consumer.

So its really the consumer who gets hit. Not one else.

[Jackass]

But then when their are spending cuts on hospital hours of little or no service level and a pointless millitary barracks to sell the site for multi-millions, there is uproar in the media too?

You can't tax your way out of a recession, but then if every tax hike and every expenditure cut is going to be met with so much drama then good luck to you, what did you expect when a Government came in and said that there was a lot of pain to be felt, but they're sorting this out...

Only in time will we see if this hike is a good idea. If it wasn't for "sharing a border" with the North, it would absolutely be the right idea, but the border is a curve ball, but I imagine that retail will only drop off slightly where as VAT income (which is on pretty much everything you buy) will rise significantly. It mightn't be pretty, but we'll be better off for it imho.

[Jackass]

LighterGuy wrote: »

See this rise to 23%,
It aint going to hurt any business. They'll just pass it on to the consumer.

So its really the consumer who gets hit. Not one else.

As with any tax hike, this is always the case. (smokes, oil etc.)

If sales fall as dramatically as people are suggesting, big retailers will absolutely absorbe the tax hike though. I don't think they'll have to though.

ilovesleep

LighterGuy wrote: »

See this rise to 23%,
It aint going to hurt any business. They'll just pass it on to the consumer.

So its really the consumer who gets hit. Not one else.

But consumers will spend less and less to the degree some businesses will close down due to not taking in enough of an income. I'd say many businesses are just staying afloat as it is.

[Jackass]

True for certain sectors. The motor industry (and most "major" purchase industries) will suffer big time from this hike, who are already just about keeping the head above water.

earpiece

LighterGuy wrote: »

See this rise to 23%,
It aint going to hurt any business. They'll just pass it on to the consumer.

So its really the consumer who gets hit. Not one else.

Actually, it will hurt business. Folk have a finite amount of money, if they are paying 2% more for goods, they will be consuming less, therefore business will sell less, and net result is state (and business) take in less- it's called a supressed economy.

carfiosaoorl

I cant remember the poll options (too much wine) but I love buying online and will continue to do so. You can save a bomb by buying for the US, even with shipping costs. I love me a bargain:D

ps what the fcuk is atari jaguar

Noreen1

ejmaztec wrote: »

A bunch of fucking morons who earn so much money, that they won't notice the extra that they'll have to pay for goods and services.

The rest of us can go fuck ourselves.

+1.

The trouble with people who have very generous salaries, is that they tend to forget that the rest of us have a finite income.

You can only pay VAT on items that you can afford to buy, so that 2% that might have gone towards a non-essential item, will instead pay for the necessities.

Revenue raised on "essentials" may go up - but it will be balanced by a drop in non-essential items, until additional welfare payments have to be made when people are forced out of work, and onto the dole queues....

Six to eight weeks on minimum wage every year for our TDs, with no access to their "investments" might make them see sense...:p

My name is URL

It's gonna piss people off big time... 2% isn't a huge increase by any means, it would be hardly noticeable when purchasing most goods. The sentiment behind it is what will do the most harm.. between this and the 'property' tax, those already feeling hard done by are going to object.

It's just such a dumb move to make right now.

ilovesleep

I was doing some maths and maybe I am wrong, god I hope I'm wrong but if something costs 40 euro and they add 23% VAT, thats an extra 9 euro something added in tax.

mdoyler2

the germans must think its a good idea, it was sent to them for approval.

starbelgrade

ilovesleep wrote: »

I was doing some maths and maybe I am wrong, god I hope I'm wrong but if something costs 40 euro and they add 23% VAT, thats an extra 9 euro something added in tax.

The current highest rate of VAT is 21%. So if something costs €40 under that rate & the rate increase by 2%, then it will cost €40.66.

earpiece

ilovesleep wrote: »

I was doing some maths and maybe I am wrong, god I hope I'm wrong but if something costs 40 euro and they add 23% VAT, thats an extra 9 euro something added in tax.

If it costs €40 now and includes VAT at 21% an increase of 2% will make it €40.66, but add that 2% to everything on the 21% rate, and money will disappear.... 2% faster.

ilovesleep

earpiece wrote: »

If it costs €40 now and includes VAT at 21% an increase of 2% will make it €40.66, but add that 2% to everything on the 21% rate, and money will disappear.... 2% faster.

Ah, I see! I knew I was going wrong somewhere. I was fit to have a heartattack at the calculator.

gigino

partyatmygaff wrote: »

More people buying online from the rest of Europe is what sounds most likely.

Our government will only have themselves to blame, but they wo'nt care, they have their golden pay + pensions.
The people worse affected will be those retailers who are struggling to compete on an unfair playing pitch. Our vat + costs + delivery charges are among the highest in Europe. The government does not want self employed / small business here to succeed. They kick them when down.

K-9

starbelgrade wrote: »

The current highest rate of VAT is 21%. So if something costs €40 under that rate & the rate increase by 2%, then it will cost €40.66.

When you add in water & property rates and income taxes rises and cuts to SW, it just means prices will go up when people have less and less to spend.

VAT receipts have trailed behind expectations for months. I can't see this actually working. Suppose we'll see.

Squall19

So an extra

16.5 cent on 10 euro.

€1.65 on 100 euro

€16.50 on 1000 euro

€165.00 on 10,000 euro

€1650.00 100,000 euro

That's alot

starbelgrade

ilovesleep wrote: »

Ah, I see! I knew I was going wrong somewhere. I was fit to have a heartattack at the calculator.

Basically if something is at the 21% VAT and you want to work out the cost of it at the 23% VAT rate, just divide it by 121 then multiply it by 123.

eg. €40 / 121 = 0.33 x 123 = €40.66

Due to rounding up of figures it will add 2 cent to a pound, but only €1.65 to every hundred pounds. Therefore cheaper goods or smaller items will be hit harder.

Capt'n Midnight

Gunmonkey wrote: »

E - Make people buy more Atari Jaguars

They don't make them locally

earpiece

gigino wrote: »

Our government will only have themselves to blame, but they wo'nt care, they have their golden pay + pensions.
The people worse affected will be those retailers who are struggling to compete on an unfair playing pitch. Our vat + costs + delivery charges are among the highest in Europe. The government does not want self employed / small business here to succeed. They kick them when down.

Greese 2...... not the movie

the groutch

think there might be a bit of an overeaction to the difference a 1.67% increase in the price of some goods (not all) is going to make.

earpiece

the groutch wrote: »

think there might be a bit of an overeaction to the difference a 1.67% increase in the price of some goods (not all) is going to make.

Well, if you look at it on it's own it's not much.... but factor that a household charge is on the way, increase in fuel cost is on going, universal social charge etc. it's just soaking up the last few cent.:(

imitation

Been there done that, the last increase of .5% was deemed a disaster, so 2 years later we are applying 2% instead ?

The problem is that this idioicy is coming straight from the EU, who are determined keeping doing the same thing (Bailouts and austerity) and keep expecting a different results.

Personally I don't mind higher rates of taxation, but only where its for the actually benefit of the people, the nordic country's are a good example of this. On the other hand we are rapidly changing from low taxation to high taxation in the middle of deep recession and mainly benefiting the larger EU members.

starbelgrade

the groutch wrote: »

think there might be a bit of an overeaction to the difference a 1.67% increase in the price of some goods (not all) is going to make.

I agree, but perception is a huge factor here. What is actually going to happen & what people perceive is going to happen is going to have huge effect on people's spending habits.

At a time where the government should be concentrating on generating domestic spend, they're actually going to reduce it as people shop elsewhere or not at all.

It's ridiculous, as getting 21% of something is better than getting 23% of nothing.

It also makes you wonder how they managed to drop the second VAT rate during the year & why they simply didn't increase that back up instead of hitting the higher VAT rate which is fairly high as it stands.

the groutch

earpiece wrote: »

Well, if you look at it on it's own it's not much....

that's my point, and with alot of stuff still being zero rated, it'll end up being about a 1% increase on the weekly shop.
I'd take a 1% increase in my shopping over closing down an A&E every time

earpiece

the groutch wrote: »

that's my point, and with alot of stuff still being zero rated, it'll end up being about a 1% increase on the weekly shop.
I'd take a 1% increase in my shopping over closing down an A&E every time

I hear you.... I guess I'm coming from the perspective of a small business owner who may see reduced trade, on top of increases in operating costs. ie- I think it may reduce my dismal income further.

Chuck Stone

I think it should be noted that on essential items VAT, as it's a flat tax, will hit the poor, low wage earners and those on fixed incomes like disability allowance, JSA, OAPension the most.

Example.

You need to replace a cooker. It's €200 before VAT but let's say €240 after VAT.

€40 as a percentage of say €200 per week (20%) is a lot more than €40 as a percentage of €600 per week (6.6 %)

ejmaztec

the groutch wrote: »

think there might be a bit of an overeaction to the difference a 1.67% increase in the price of some goods (not all) is going to make.

The psychological effect of the increase in vat will do damage to the retail sector. Most people strapped for cash won't see it as 1.67%, they'll just have another reason to cut back.

There are enough empty shops as it is, and this will lead to a lot more. The knock-on of this will be a loss of jobs and less competition as a result of fewer businesses.

If they do manage to reach the estimated target for extra vat, it will probably be cancelled out by extra unemployment pay, and less taxes collected from retailers.

This government is as clueless as the previous one as to how businesses are run.

Solnskaya

ejmaztec wrote: »

The psychological effect of the increase in vat will do damage to the retail sector. Most people strapped for cash won't see it as 1.67%, they'll just have another reason to cut back.

There are enough empty shops as it is, and this will lead to a lot more. The knock-on of this will be a loss of jobs and less competition as a result of fewer businesses.

If they do manage to reach the estimated target for extra vat, it will probably be cancelled out by extra unemployment pay, and less taxes collected from retailers.

This government is as clueless as the previous one as to how businesses are run.

nail on head. They are not financial wizards, not even business people. They are "popular" teachers, civil servants, barristers and solicitors who were self absorbed and self important enough to run for election. No normal person would be arrogant enough or pig headed enough to run for public office, so we get the egotists and the class swats as our "leaders". They have a massive salary, in the bank every week come what may, with a generous in the extreme pension to follow. They have NO clue about running a business, and an out of touch view on running a household. A 2% VAT increase sounds perfectly sane to them, as ideally it will ensure they can continue to draw their salaries and pensions, and fcuk everyone else.