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If the VAT was cancelled on EVs in the UK, manufacturers would probably creep the net prices up to compensate.
To compensate them for what? The VAT rate has no bearing on what manufacturers get for their vehicles. In fact lower VAT = more sales = more profit without manufacturers changing any pricing.
 

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Rich people buy more things and also more expensive things than poor people so they pay more tax.
That holds until a certain threshold. How many BMW's can someone buy who makes several millions a year? How many villas do they need? And moreover, as mentioned by Jimbo, the rich have all kinds of loopholes that exempt them from paying taxes and levies. The United States were the most prosperous in the 50's of the previous century, when the rich were paying a lot of taxes (up to 94%).

My god, unless you are one of the 0.1%, I for the life of my cannot understand how an average Joe can defend that the super-rich get all these benefits and call someone who wants to tax them higher a communist. Taxing the rich is the best way to get a proper distribution of wealth. Productivity per employee has gone up 70% since the seventies (see here). I don't know about others, but I am not earning a wage that's 70% higher (and corrected for inflation) than my father's. So where's all that money? Right.
 

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To compensate them for what? The VAT rate has no bearing on what manufacturers get for their vehicles. In fact lower VAT = more sales = more profit without manufacturers changing any pricing.
Much of Joe Public who can’t reclaim VAT, would see this as 20% off.
A marketing department might see it as an an opportunity to lift net prices marginally, or/and use the removal of VAT as a reason for not agreeing to discount their product as they would have done previously - “You’ve already got 20% off. How much more do you want?!”

Some manufacturers already do similar with the OLEV Grant, calling it “discount” from the list price. Which it most definitely is not.
 

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Rich people buy things through their companies, who pass the VAT and other taxes (i.e. corporation tax and employers income tax) along to their customers ;)
That's a prejudice, joke or just pure nonsense (or maybe true for you personally). In general, rich people buy a lot of things and pay a lot more tax then poor people. Poor people use also more of the tax financed facilities. That's a scientific fact.
 

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Probably cheaper than paying the income support for thousands of unemployed factory workers.
The problem is that removing VAT from luxury items is the wrong way to go. To call it a "job saver" is nonsense. It is better and healtier for the economy if companies which don't make competitive products disappear. Others will start up and employ those people. I think that after this COVID-19 the world have learned a lesson and more companies will move back home from China, or move to a nearer location.
 

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That holds until a certain threshold. How many BMW's can someone buy who makes several millions a year? How many villas do they need? And moreover, as mentioned by Jimbo, the rich have all kinds of loopholes that exempt them from paying taxes and levies. The United States were the most prosperous in the 50's of the previous century, when the rich were paying a lot of taxes (up to 94%).

My god, unless you are one of the 0.1%, I for the life of my cannot understand how an average Joe can defend that the super-rich get all these benefits and call someone who wants to tax them higher a communist. Taxing the rich is the best way to get a proper distribution of wealth. Productivity per employee has gone up 70% since the seventies (see here). I don't know about others, but I am not earning a wage that's 70% higher (and corrected for inflation) than my father's. So where's all that money? Right.
I don't know what's your problem is with me having a different opinion from yours...? That is perfectly OK except in a communist dictatorship, you know that, don't you...?

My comment has nothing to do with the 50's USA, which I have no idea about, and has NOTHING to do with VAT in EU at all, so I am not interested in discussing that. I don't know where you live and why you have this attitude, but I live in EU and currently EU definitely need the extra tax to finance the heath care systems and other issues caused by the Corona virus. Now it is DEFINITELY not time to remove the VAT from luxury items like EV.
 

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That's a prejudice, joke or just pure nonsense (or maybe true for you personally). In general, rich people buy a lot of things and pay a lot more tax then poor people. Poor people use also more of the tax financed facilities. That's a scientific fact.
And yet somehow we all want to be the tax burdened rich man rather than the lucky poor man getting all this stuff for free.
 

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Much of Joe Public who can’t reclaim VAT, would see this as 20% off.
A marketing department might see it as an an opportunity to lift net prices marginally, or/and use the removal of VAT as a reason for not agreeing to discount their product as they would have done previously - “You’ve already got 20% off. How much more do you want?!”

Some manufacturers already do similar with the OLEV Grant, calling it “discount” from the list price. Which it most definitely is not.
Indeed, but that wouldn't be compensation, as they don't lose anything by VAT being reduced, which is what you originally implied.
 

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That holds until a certain threshold. How many BMW's can someone buy who makes several millions a year? How many villas do they need? And moreover, as mentioned by Jimbo, the rich have all kinds of loopholes that exempt them from paying taxes and levies. The United States were the most prosperous in the 50's of the previous century, when the rich were paying a lot of taxes (up to 94%).

My god, unless you are one of the 0.1%, I for the life of my cannot understand how an average Joe can defend that the super-rich get all these benefits and call someone who wants to tax them higher a communist. Taxing the rich is the best way to get a proper distribution of wealth. Productivity per employee has gone up 70% since the seventies (see here). I don't know about others, but I am not earning a wage that's 70% higher (and corrected for inflation) than my father's. So where's all that money? Right.
IMO, chasing after the 0.1% is a waste of time and effort.

Instead, a better approach may be some kind of renumeration rule, which ensures that employees are appropriately rewarded for the value they create. This would distribute the tax burden more broadly and keep more money in the economy. Like this guy:

 

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And yet somehow we all want to be the tax burdened rich man rather than the lucky poor man getting all this stuff for free.
Exactly. I am not the one complaining, I paid my VAT and paying the high income tax I must pay. It is needed and necessary for a solid economy and to be able to finance what´s financed by taxes, like police, fire fighters, health care, judicial system, roads, unemployment, pension systems, social help and so on. Removing taxes would just create more poverty, the rich would get richer, the poor would get poorer.
 

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People keep buying cheaper stuff from China. This is exporting money which makes the UK poorer and China richer. No wonder there are more Billionaires in China than USA and certainly the EU.
 

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People keep buying cheaper stuff from China. This is exporting money which makes the UK poorer and China richer. No wonder there are more Billionaires in China than USA and certainly the EU.
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No need to panic, this is how it works. The DMO (government debt management office) issue gilts at near zero interest rate (coupon) and its bought by the Bank of England. Net result of this is that the interest on our national debt has actually gone down compared with last year and is well within government targets. The quantitive easing will likely produce inflation which will reduce the actual debt. The economics is quite simple - everybody wins with no need for extra taxes and plenty of freedom to reduce VAT on EVs to zero.
 
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