Boudoirs and builders
BAD NEWS for women who like caviar and pornography and have very small feet. All their pleasures, as Kenneth Clarke likes to point out, come free of Value Added Tax. He thinks that VAT's scope is too narrow, which means that the rate is too high. His predecessor jacked it up to 171/2 per cent to make up for the loss of the poll tax. It now fails the first test of an effective tax: is it worth dodging? It sets too high a premi- um on ready cash, as Mr Clarke's builder may have told him. Widening its range, though, would send up squeals of protest from a thousand boudoirs. A chivalrous Chancellor, or one with an instinct for simplification, would prefer to announce in his Budget that from then on, every- thing that was not taxed would be exempt. This apparent statement of the obvious would do away with zero rating, the most uneconomic way of sending money round in circles that has ever been devised. Then the VAT rate could come rattling down without making caviar too expensive.
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