Imagine I spend €300 per month, every month.
Then imagine that the government decide to increase sales tax (VAT/IVA) or something from next month. It will mean that, in future, instead of spending €300 I will have to spend €350.
Then, imagine that the government decide to postpone the tax increase until, let’s say, the end of the year.
So, instead of spending €300, as I do now, I will be spending €300 – the same – until the end of the year.
Let me just count out how much I have ‘saved’. Oh, I see that, in fact I have not saved anything but I will not be spending extra for a little while yet.
Compare this with:
I spend €300 per month every month.
The government CUT taxes from next month. It will mean that, instead of spending €300 per month, I will be spending €250 per month. In this case I will be spending €50 less and, so I can actually ‘save’ that money. It’s a kind of bonus to me and is a real saving since I will, actually, be paying LESS.
People’s ideas of ‘saving’ is incredible. The only way you save anything is to spend LESS than you did before.
V used to try this thing with me some times, a long time ago, and it’s logic was of the very worst kind.
The little scenario went like this:
“Do you know how much I saved with this shirt?”
“Well, as you actually SPENT money, I can’t see how you have SAVED any at all!”
“But it was a bargain”
OK, so I paraphrase a lot – but you get the picture. I know other people who do this – it’s not just him.
But back to recent news.
If a tax increase is not put into effect, nobody has SAVED anything at all. It does mean that, in the future, people will not have to spend as much as they might, but it hasn’t made anything cheaper.
And so, this latest so-called U-turn by the government of the UK to NOT put up the tax on petrol (gas to you, Gail) as had been planned, is being lauded and trashed by all and sundry at the same time. But it seems, to me, that everyone is missing the point or points.
This decision to postpone the tax hike will NOT mean that anyone will SAVE money. They will just not spend as much as they might have done.
And this is no U-turn. The hike is not cancelled – merely postponed.
So here is something that is being done in response to the beating they were getting for daring to increase a tax when the country is all but down the drain (See my post Death Valley – UK High Street). But don’t think, for a moment, that anyone will be saving anything.
And then there was this little piece with a video of the Newsnight “interview”
… and then this stupidness – in the same paper!
To be honest, she deserved everything she got. The answer to “When did you know?” is very simple and involves a time or, at least, a date. From there on, it was always going to be downhill.
But, then, if they can equate ‘saving’ to ‘not having to spend more’ then, I guess, we’re all doomed. Might as well have V go and be Prime Minister!