Tuesday, 25 November 2008
Connecting the dots
More bad news was bound to come out of the PBR today. Following on from yesterday, Guido has an excellent scoop on 18.5% VAT to come in 2 years time.
As I pointed out yesterday, there is more to this than meets the eye. For a long-time there has been a desire for tax harmonisation across the EU. Indeed, by raising taxes so much in the UK over the past 8 years, Labour has moved us to a position where this may even be beneficial to the majority in the UK due the the EU average having lower taxes than the UK.
Even if that seems far-fetched - VAT harmonisation has been on the table for a long-time. The EU will be looking to consolidate its power in a time of crisis; this is one of the first steps.