This and VAT
Sir: I noticed in the leading article of 27 April the suggestion that VAT should be raised to 20 per cent and local tax abo- lished completely. If this is a good idea, why would it not be equally or even more beneficial to raise VAT to the appropriate level and abolish income tax entirely? I can see several possible advantages to this course: since VAT is a tax on spend- ing, savings would be encouraged; VAT is a progressive tax, in that the less well-off presumably spend less and would therefore pay less tax; essential items, as now, could be zero-rated to reinforce this effect; con- siderable time and money would be saved by eliminating the need for much of the current tax-collection bureaucracy, while the taxpayer would no longer feel the need for expensive accountants to reduce the tax burden; VAT is a more difficult tax to evade, while, finally, a tax solely related to spending would introduce the element of personal choice, which our Government holds so dear.
I am probably wrong about all of this, so I would be grateful if someone could explain why.
Raymond Keene
23 Hyde Park Place, London W2
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