VAT: Progressive or Regressive?

In his emergency Budget in June 2010, George Osborne, the Chancellor, announced an increase in VAT from 17.5% to 20.0% to take place from the beginning of 2011. When this came into place this year, Osborne, in an interview with the Today programme on radio on 4th January 2011, said: “If you look at the population and how much they … Continue reading

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VAT has now risen to 20% in the UK

The rate of Value Added Tax went up at midnight from 17.5% to 20.0%. This move was flagged in advance by the coalition government as being a necessary part of their austerity measures. On the one hand they are slashing spending across most government departments and on the other hand they are trying to raise taxes as well in an … Continue reading

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Taxes on tobacco: What works and what doesn’t work

Just come across an interesting article published this week entitled “Tobacco excise tax structure: Implications for public health” by Chaloupka, et al. and published by voxeu.org. It doesn’t sound wildly amusing on the surface but contains some interesting EU-wide research which is very relevant to microeconomics in terms of the effects of specific and ad valorem excise taxes. In February … Continue reading

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Record public sector borrowing in August

Public sector borrowing reached £15.9bn in August, which was a record figure for the month. This compares with £14.1bn in the same month last year. The current budget deficit which shows the difference between government spending and income rose by £2.3bn to £13.3bn. This is not very good news on the surface, and gives added reason to the chancellor to … Continue reading

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Higher than expected public sector net borrowing

Net borrowing in June reached £14.5bn according to figures just published by the ONS. This is slightly lower than the £14.7bn recorded in June 2009 but the markets had been expecting a figure around the £13bn mark. This is partly because tax revenues had been performing well in the previous couple of months. However, the Institute of Fiscal Studies has … Continue reading

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Record borrowing to be followed by record spending cuts?

Public sector net borrowing reached a total of £163.4bn in 2009-2010 which was about £3bn lower than forecast by the Chancellor in the April Budget, but was significantly higher than the £96.5bn of borrowing in the previous financial year. This was the largest borrowing figure since the Second World War and is the equivalent to 11.6% of GDP. National debt, … Continue reading

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Record US budget deficit in February

So you think we have problems in the UK? In February the US recorded a budget deficit of $220.9bn which is just under £150bn. This figure was up 14% on the same month a year ago and the biggest monthly deficit ever recorded in the US. The country has now been running a deficit for seventeen consecutive months which is … Continue reading

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UK Borrowing: Worst January figure ever

Public sector net borrowing was £4.34bn in January compared with a repayment of £5.3bn in the same month last year. A poll of City analysts taken by Reuters had forecast a repayment in January of £2.8bn. In reality, we ended up with the worst figure for any January since such records began in 1993. January is usually a bumper month … Continue reading

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Public sector borrowing hits record high in November

The UK’s public sector net borrowing reached £20.3bn in November which is the highest monthly figure since these figures were first started in 1993. This figure compares with the £15.5bn which was recorded in November 2008. This is according to figures published by the ONS this morning.   According to the Pre Budget Report the chancellor is expecting total public … Continue reading

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Missing tax costs the UK £40bn a year

HM Revenue & Customs published a piece in the printed Pre Budget Report called Protecting Tax Revenues 2009. In this they projected that there was a “tax gap” of 8%, which means of the total tax which they would expect to receive they are unable to get their hands on 8%. And, 8% is not a trifling matter, as it … Continue reading

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