Petition to stop DVLA 700% increase in road tax for motor homes

[pjm-84]

I was stuggling to understand the concerns in this thread until the explanation from Digger at the end.

The VED changed and it seems motorhomes slipped through the net. The 700% is taken slightly out of context as its the first year's rate and worst case change based on the most polluting.

 

[SteveH]

You can say it's a moral issue if you want, or crap, but all governments have to raise the tax revenue to fund the level of public services mandated by the electorate, and all use a mix of direct and indirect taxes.

I'm not an economist but the economic principles aren't too hard to grasp. If you tried to replace indirect taxes (chiefly, VAT and excise duties) you'd need to more than double income taxes and that would predictably drag down output by imposing disincentives to employment.

Indirect taxes also have other advantages, in being cheap to collect and able to applied to all consumers not just those who are earning within the economy (including, for example, foreign tourists). They can also be used to modify demand for goods that are not socially beneficial - eg the taxes on petrol and diesel which are an effective pollution control mechanism.

Foreign visitors can claim back sales tax (even EU visitors soon I would imagine). The increase in road tax for vehicles costing over £40k was a wealth tax and has nothing to do with pollution. As far as taxing diesel vehicles, they are a product of a government policy that has driven development in the direction for many years and now leaves us with little in the way practical choices making the increases a little hard to stomach. As far as a flat tax, I can't imagine anything more likely to put people off spending than a 20% sales tax and the general complexity of the current tax system makes it easy for the very wealthy / corporations to find loopholes.

 

[pjm-84]

Not really. The tax loopholes, as you put it, allows a global company to chose where they prefer to pay their tax. That's globalisation.

We have to pay tax. Many don't, the few more so than others.