GM - I normally agree with most of what you post on here. However, on this, I totally disagree. GST/VAT is always regressive. As you know the original purpose of VAT (apart from the obvious revenue raising) was to either put a brake (raise the rate) on spending in a time of inflation or used as a stimulous (reduce the rate) when an economy was sluggish. The UK and many European govs increased VAT/GST during a recession and one can plainly see the effects - which are negative. Your vision makes sense only if your consumption argument is correct in that top earners spend more than anyone else. I would challenge that. I'd suggest that the aspirational middle would suffer most initially then retailers and then the "working class". I'll give you an example (its not real world but you'll get the idea). Family has just bought a house and want to modernise it - builder quotes 220k for extension etc. 20k is GST. Family can't afford that so either don't do it or reduce the spend. Builder gets this a lot so has to reduce his workforce with the obvious negatives for all concerned. The States then have to start reversing all the good ideas you had regarding tax allowances for the lower paid but still keep GST at the same level because of an increased welfare bill and lower overall revenues. If the UK reduced VAT to 10% tomorrow within six months the economy would be recovering - the Treasury would suffer initially but increased employment and therefore revenues would make any deficit up over a longer period. Obviously the UK economy is more complex than that but I hope you see what I'm getting at.
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
