Tuesday, 4 January 2011

VAT rises

Tax is a difficult one to consider scripturally. Certainly the idea of the rich giving more to the poor has precedent, but less clear is whether it should be enforced. Interestingly the Old Testament tithes seem to be a standard percentage of what one has. This may feel unfair in doing less to lessen economic inequality than might be done if the rich paid a higher percentage, but it is undoutedly fair in the sense that all give the same proportion, and that this is more the wealthier you are. This would suggest the way to increase tax revenue should be to increase the percentage paid on income across the board. Instead, we have been given a VAT increase.

Now it would go beyond scripture to suggest that its model of taxation is prescriptive for every society, and so it is worth reflecting on the benefits of a VAT increase. In short, it is a tax on consumption rather than income - whilst exempting core needs such as food and children's clothes. And there is something surely commendible in this for a number of reasons:

  1. It introduces the idea of choice. So we are not taxed unless we choose to spend on what will usually be non-essentials.
  2. It protects the environment as the less bought means the less resources consumed in meeting demand.
  3. It tempers materialism, by dampening our seemingly insatiable desire for more that we do not need.

It is of course a tragic fact that this tax will hit the poor more than the rich. But these three benefits are noteworthy when considering today's culture. Moreover, if materialism is tempered, then there is an indirect means whereby the mindset of some who are poor may be changed in a way that might lessen their poverty.