Class war and misleading graphs from ConservativeHome

Well the budget is out and Tim Montgomerie helpfully provides this graph showing that those with the broadest shoulders are baring the greatest burden.Screen shot 2010-06-22 at 15.02.45

Or are they?

His second graph (added an hour later in an update) shows the impact of the budget as a percentage of income and it paints a somewhat different picture.

Both graphs together tell many stories.

We are shown the dreadful impact VAT is going to have on the poorest, even with all the exemptions they are still going to feel the biggest burden because of it.

We are shown that the Tories are not afraid to offer the very richest the largesse of Government, they are suffering relatively little.

About our society, the difference in the absolute figures and relative figures shows us how unequal we are.

About Tim Montgomerie?

Well his preference for the first graph shows he is both an excellent propagandist for the wealthy [1] and someone who doesn’t understand poverty. A graph that shows poor people can’t pay much for something, and the wealthy can, isn’t exactly demonstrative of much that isn’t obvious, if you know what to look for in the first place.

[1] For those who can’t see the venom dripping from their screen, this is not a complement.

***

Sadly, I don’t have much time to analyse the budget. I stick with my original position as outlined in the below posts.

Dave, Nick and George: Crushers of optimism, enemies of business

Paul Krugman is angry

This country doesn’t have an overdraft you twat

I hope I’m wrong, but I don’t think I am. George is going to tank the economy, and while I don’t think we are destined for a double dip we are going to be in a worse state than we needed to be for sometime. Perhaps we’ll see some more activism from the Central Bank to offset some of this, but I’m not holding my breath.

Time to get your barricades polished.

File:Eugène Delacroix - La liberté guidant le peuple.jpg

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4 thoughts on “Class war and misleading graphs from ConservativeHome

  1. The VAT rise is not going to make that much of a difference. The clue is in the name Value Added Tax. It’s a tax on stuff that has added value.

    To avoid the tax just go for an equivalent that hasn’t had value added to it. Also, a lot of essentials don’t have VAT – such as food, children’s bit and pieces, medical stuff, goods bought at a charity shop, etc.

    As an example of how to avoid VAT rather than getting a butty from the local sandwich shop make your own. It all comes down to whether the time spent doing yourself is worth the price of buying with the VAT. If you are very poor and not working you have lots of time. Your time is very cheap. If you are working then your time is a bit more expensive. How much depends on your work.

    None of the examples, from the Tories or from the Left take into account the fact the people will change their buying habits because of the increase. If the increase actually means that those who are already close to the edge in being able to afford the basics go over it.

    The VAT increase is also small at 2.5%. The same 2.5% decrease in VAT that didn’t make everyone suddenly go and buy loads of now cheap goods. On a product priced at £9.99 the increase will now mean it’s priced at £10.20. So on cheap items, the increase is only pence. Bear in mind that shops generally put on sales where they cut a lot more than 2.5% off their prices.

    Also, look at how items are sometimes priced. At £x.99 where x is a random number. So either the product goes from £9.99 to £10.99 making more money for the manufacturer and better for the workers at the company but bad for the poor. Or the price stays at £9.99 with the manufactuer taking a cut which is good for the poor. And the manufacturer (or supermarket) can make a big deal out of keeping the price the same.

    1. That is unconvincing logic at best and reeks of Tory paternalism with regards to telling people how to live, it is a hop skip and a jump away to the logic of “let them eat cake” and fails to address the key point which is that the many are once again expecting to cover the shortfall and not the few that can actually afford it.

    2. This is propaganda you are providing. No offence.

      Your armchair theorising is interesting, but why don’t you look at the actually existing situation? We don’t need theorising, we have empirical evidence and of course the treasuries own forecasts, and the IFS. This is going to hit the poor, even when they change their consumption habits.

      There are other arguments to be made for VAT, but you don’t make them.

      It is one of the least market distorting taxes out there (other than a Land Value tax, or so I am led to believe) so if efficiency is your thing, by all means argue on that ground.

      But don’t argue that VAT isn’t regressive, it is, is actually kinda the point of it. You know tax consumption (which poor people do) rather than investment/capital/profits (which poor people don’t).

      There are also other problems with your analysis:

      “As an example of how to avoid VAT rather than getting a butty from the local sandwich shop make your own. It all comes down to whether the time spent doing yourself is worth the price of buying with the VAT.”

      You describe a situation where the cost of the tax is borne in lost time rather than lost money, because the person consumes less. This is still a cost. It is a real cost and it is one the poorest are going to bear.

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