Sunday, June 18

Lowering VAT, who will pay the real price?

VAT in Israel will be lowered by about 2%.

Thus, anything we buy should become cheaper, thereby enabling us perhaps to buy more or save some money. People in the lower income ranks spend most of their income on basic stuff, such as food, public transport, health and education, housing etc. When basics become a little cheaper, they will have a little more.
Great....or, is it so great?
After all, the wealthier you are, the more you can affor to spend and usually do buy. So in fact, the wealthier you are, the more you will gain from the lowered VAT.
That's equasion number one. Yet there is another equasion to be made. The state will receive less income from VAT, which needs to be taken care of in the usual way: budget cuts.
Three guesses which budget cuts: education? health? welfare?

And as usual, those affected hardest are the poor, those living far away from the cozy northern addresses of the policy and decision makers.
Lowering VAT does NOT have an equal effect on all at all, and the poor will pay twice for the increased wealth of the already rich.
Polltax upside down as it were or הפוך על הפוך

1 comment:

Lisa said...

היי יהודית,

מאוד נהנית מהבלוג של , מנסה לתת לו חשיפה ואשמח להיפגש - אם מתאים לך. תוכלי לשלוח לי מייל? הכתובת מופיעה בבלוג שלי, צד ימין למעלה.