GST could go above 3%, warns Chief Minister

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GST could go above 3%, warns Chief Minister

Post by GD on Sat 14 Feb 2009, 3:34 pm



GST might have to rise above three per cent if savings or tax revenue decline significantly in the coming years, says the Chief Minister.
Senator Terry Le has Sueur warned that Islanders could have to face the prospect of higher taxation as he revealed that GST was on track to achieve the target of raising £50 million this year.
He said that States economists and statisticians were already attempting to forecast what the likely impact a recession would have on the tax take – particularly on income tax. He suggested that income tax receipts were likely to dip in the coming years and that steps would be needed to keep the economy on track. That could mean raising tax in other ways, possibly by leaning more heavily on GST.
Senator Le Sueur said that the latest figures indicated that GST would achieve its target. ‘We have figures for more than half-way through the year and the current indications confirm that trend,’ he explained. ‘GST has been in place for the best part of a year and we have been able to put money into the Stabilisation Fund, which I am sure we are going to be grateful for in the years to come. (from thisisjersey)

Looks like it will be the easy option to fill the black hole..


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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Sat 14 Feb 2009, 6:43 pm

The raising of GST rate was always expected, and yes it will be the 'easiest' option from the Minister's point of view, but probably the best too. I can't think of a better way to raise more tax revenue fairly and I've not heard any better ideas from anybody else either. I wonder how the JDA intend to collect enough in tax with the commitment to reducing GST to nil within 3years??

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Re: GST could go above 3%, warns Chief Minister

Post by Fast Robert on Sat 14 Feb 2009, 7:00 pm

There are lots of better ideas but they involve harming the precious rich. Land tax, wealth tax, inheritance tax, progressive income tax etc. Land tax is one of the better ones because you can't hide that by using our fantastic mechanisms. As is taxing the potential profit on property sales. That would have the added bonus of deterring property investors - a scourge on the market. A house is a home, not a financial instrument.
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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Sun 15 Feb 2009, 12:48 pm

Fast Robert wrote:There are lots of better ideas but they involve harming the precious rich. Land tax, wealth tax, inheritance tax, progressive income tax etc. Land tax is one of the better ones because you can't hide that by using our fantastic mechanisms. As is taxing the potential profit on property sales. That would have the added bonus of deterring property investors - a scourge on the market. A house is a home, not a financial instrument.
You'll note that I suggested there weren't any better ideas that achieved the income fairly.

How would you operate a 'Land Tax' fairly? A person works hard to earn enough money(being taxed while doing so) to purchase a property(paying stamp duty in doing so) they live in that property alone and you think it's fair that they are then taxed somehow for doing so while somebody enjoys the accommodation given to them by the States and paid for through the taxes that first person is paying?

Then the property owner dies and you think it's fair that the money they've saved through a life's hard work is given over to the inheritance tax pot rather than to the their children?

Progressive income tax isn't fair either, why should those on higher incomes pay a greater % to tax rather than the lower income earners paying anything at all?

Many of those on low incomes (myself excluded) are looked after very well by the higher income tax-payers through the States, and while the best idea would be for the States to become more efficient and less wasteful with those hard-earned taxes, maybe the 'poor' should accept that they should be grateful for any help they get rather than moaning they can't afford the latest mobile phone or the SKY sports package for the big screen TV.

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Re: GST could go above 3%, warns Chief Minister

Post by Jsygal on Sun 15 Feb 2009, 8:52 pm

Many of those on low incomes (myself excluded) are looked after very well by the higher income tax-payers through the States, and while the best idea would be for the States to become more efficient and less wasteful with those hard-earned taxes, maybe the 'poor' should accept that they should be grateful for any help they get rather than moaning they can't afford the latest mobile phone or the SKY sports package for the big screen TV.

I work and so does my partner we have 2 children and have been "lucky" enough to have been able to purchase our house. I say lucky beacuse of how hard it is now for first time buyers to get a decent sized place for under 300k (paying approx £1600.00) and this is before the credit crunch and mortgage lenders droping the amount of % borrowing.

Like many in our situation yes we have at times found it tough but we are greatful for what we have managed to achive. We are taxed even with a heafty mortgage and 2 children, if anything were to happen to our jobs we wouldnt recieve any help.

Again i really dont want to sound ungreatful for what i do have because i am. But i cant help feeling that society punishes those who have managed to break away from housing there is no medium in maybe sorting out who dont need help (but recieving it at what ever cost) to those just starting out which if GST was to rise would just make it harder for them people and even worse for those wanting to make the fist step onto the ladder.

A fair system is what is needed! Just because someone is in states housing doesn't mean that they are worse off or better off and likewise for people in private rented accomodation and on the property ladder!

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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Sun 15 Feb 2009, 9:57 pm

Jsygal wrote:...A fair system is what is needed!...
Any suggestions for a fairer system than GST?

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Re: GST could go above 3%, warns Chief Minister

Post by karma on Sun 15 Feb 2009, 10:01 pm

What is fair about GST??
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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Sun 15 Feb 2009, 10:51 pm

It's a consumption tax, the less you use the less you pay; in theory isn't that what makes a good tax? you tax something that has a cost to society to pay that cost and or reduce the occurrence of the cost. There's a cost to waste disposal, so taxing consumption of stuff that creates waste makes sense. There's a cost to alcohol consumption, so tax the consumption etc. etc.

There isn't really any tax I can think of that's totally fair, the well off always end up paying for services they don't use and the poor always end up receiving services they haven't funded. That my be the civilised society we all want, but it doesn't make it fair or equal.

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Re: GST could go above 3%, warns Chief Minister

Post by Spirit on Sun 15 Feb 2009, 11:08 pm

I predict that within 10 years, both Bailiwicks will be on 17.5% VAT


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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Sun 15 Feb 2009, 11:16 pm

IMO, Jersey won't go to 17.5% unless the EU VAT rates go a lot higher than that and or other local taxes, like income tax fall dramatically, and or some of the exemptions that people have called for on medicines and food etc. are introduced.

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Re: GST could go above 3%, warns Chief Minister

Post by Fast Robert on Mon 16 Feb 2009, 8:49 am

Troy McClure wrote:
Fast Robert wrote:There are lots of better ideas but they involve harming the precious rich. Land tax, wealth tax, inheritance tax, progressive income tax etc. Land tax is one of the better ones because you can't hide that by using our fantastic mechanisms. As is taxing the potential profit on property sales. That would have the added bonus of deterring property investors - a scourge on the market. A house is a home, not a financial instrument.
You'll note that I suggested there weren't any better ideas that achieved the income fairly.

How would you operate a 'Land Tax' fairly? A person works hard to earn enough money(being taxed while doing so) to purchase a property(paying stamp duty in doing so) they live in that property alone and you think it's fair that they are then taxed somehow for doing so while somebody enjoys the accommodation given to them by the States and paid for through the taxes that first person is paying?

Then the property owner dies and you think it's fair that the money they've saved through a life's hard work is given over to the inheritance tax pot rather than to the their children?

Progressive income tax isn't fair either, why should those on higher incomes pay a greater % to tax rather than the lower income earners paying anything at all?

Many of those on low incomes (myself excluded) are looked after very well by the higher income tax-payers through the States, and while the best idea would be for the States to become more efficient and less wasteful with those hard-earned taxes, maybe the 'poor' should accept that they should be grateful for any help they get rather than moaning they can't afford the latest mobile phone or the SKY sports package for the big screen TV.

Ah, but this is where I disagree. The richer you get the more responsibility you have towards society. The strongest in any system becomes a load bearer.

The reason inheritance tax is fair is because the children haven't worked for it. Inhereting land becomes a disincentive to earn it. I'm all in favour of 100% inheritance tax. With no inheritance tax, eventually a few people will own all the land, the same way as this version of capitalism ultimately leaves power, wealth and so control in the hands of a TINY minority of people, whilst 99.9% of global populations are left with next to nothing.

Social Housing was the mainstay in the UK for decades. They were well built and offered excellent value for money for the State, all rent being reinvested into the communities, that flourished in a sense of shared destiny. It was only when Thatcher decided that individual destinies were a powerful tool to fire-sale assets for a quick buck (which duly went into the hands of a chosen few) that sink estates started appearing. Private landlords became unaccountable.

Knocking States house dwellers is just too easy. What about the idle rich? The wives and husbands of those that earn too much that they can lay about at home baking cakes and surfing for porn? Generally they will have had a good education and be qualified to do something useful for society. But no, they will meet up for coffee, or golf, and compare material in some sort of competition. These people enjoy the married couple tax breaks and end up being a net drain on society.

The rich arguing to make the rich richer is far more distasteful than a poor person wanting fags. That is the stark reality of our skewed society. We have our values all wrong. All that happens in this type of regime is widening wealth disparity, social unrest and a disincentivised underclass. The rich do not work harder in proportion to the benefits they receive from this system. It is unfairly weighted.

Couple that with the fact that the rich are more likely to be able to employ tax avoidance measures. Which they do without the merest hint of moral fibre.

The strongest must work harder to make society work better. Be a role model and get the plaudits. Otherwise the rich look like tossers.
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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Mon 16 Feb 2009, 7:14 pm

Fast Robert wrote:...Ah, but this is where I disagree. The richer you get the more responsibility you have towards society...
Yes we'll have to disagree then.

I believe everybody is equally responsible in a society, regardless of wealth or how it was earned or gifted.

You say that you support 100% inheritance tax, because those receiving from an estate have not earned it, so a partner could die and his spouse and children would be made homeless under your system because they had not earned the funds which paid for their home.

The estate would then go to be gifted to the poor, I guess them included, who also hadn't earned it?!?

Why should somebody bother working hard to provide for their children if their savings can be simply taken from them by the State upon their death? What sort of incentive would that be to anybody to do anything other than for immediate consumption?

Why brand those that don't have to work as lazy and criticize their way of life, when they do no harm, and calling them distasteful? why do you hate those that you see as rich so much?

If somebody is wealthy why does that make them a tosser unless they give their wealth to the poor? Why don't the poor work harder to achieve the same success?

I really don't understand where you're coming from if you think your brand of communism would actually work. Fair isn't about making sure everybody has the same amount of wealth, it's about making sure everybody has the amount of wealth they deserve.

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Re: GST could go above 3%, warns Chief Minister

Post by Thistle on Mon 16 Feb 2009, 7:31 pm

there will always be people who can't aspire to the kind of wealth one hell of a lot of island residents have.maybe you should live in their shoes for a while troy and see how you can cope.
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Re: GST could go above 3%, warns Chief Minister

Post by Digger on Mon 16 Feb 2009, 7:41 pm

I have worked for very rich people who have never done a days work in their lives its just been handed down . I take exception to your comment about " Why don't the poor work harder to achieve the same success"? I know loads of hard working people who have very little money due to low wages in whatever job they pursue.


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Re: GST could go above 3%, warns Chief Minister

Post by karma on Mon 16 Feb 2009, 10:29 pm

I agree wholeheartedly
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Re: GST could go above 3%, warns Chief Minister

Post by shafted on Mon 16 Feb 2009, 11:10 pm

Oh Troy, your Tory values just keep oozing out don't they?

What a strange world you inhabit if you think the rich all work hard for and deserve their wealth and the poor, well of course it's all their own fault they have no money, too stupid and lacking in aspiration. It seems to me that an over reliance on aspiration (aka greed) to earn mega bucks regardless of the consequences have got the world into the current problems of near global financial meltdown. What a really good survival tactic for the species that is.

I don't happen to believe that every one should have an equal amount of money, however there are gross distortions in the current distribution of wealth and evidence internationally that more and more of the worlds riches are being concentrated in the hands of fewer and fewer people, with the inevitable consequence that a relatively small subset of the rich get richer and an ever increasing number of people become poorer. In western society the middle classes are the next target and most likely to see their income and standard of living fall. Are they too lacking in aspiration? I don't think so.

We need to be looking at a fairer and more equitable distribution of wealth. The alternative doesn't bear thinking about.

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Re: GST could go above 3%, warns Chief Minister

Post by karma on Mon 16 Feb 2009, 11:21 pm

It's a consumption tax, the less you use the less you pay; in theory isn't that what makes a good tax? you tax something that has a cost to society to pay that cost and or reduce the occurrence of the cost.

So - today we spent the day in Jersey - we strolled around the town precinct and there were lots of people - but in the shops (some of them with 70% off) there was a distinct lack of customers...BHS was empty and so was Millets ....shops were empty with TO LET signs in the windows....we went down to Gorey and we were so sad to see the amount of closures there......and we saw a few things we would have liked, but no way were we prepared to pay GST when (for the time being) we can purchase similar items in Guernsey GST free......so sad loss - and BTW - who does not need clothes to wear? are these items really classed as a luxury item???? what next - food - a luxury???? well perhaps someone can come up with and alternative ......
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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Tue 17 Feb 2009, 2:01 am

Thistle wrote:...maybe you should live in their shoes for a while troy and see how you can cope.
You assume I'm wealthy; you know what they say about assumption?

Digger wrote:I have worked for very rich people who have never done a days work in their lives its just been handed down...
Why tar everybody with the same brush? Most of the wealthy people I know worked very hard for what they have, and I take exception to them being labeled tossers or the idea that it is their responsibility because they've already worked hard to become wealthy to look after the poor more than the poor have any responsibility to make society better.

The very wealthiest people I've known have been the most generous and giving, both of their money and time and nature, the very poorest I've known have thought nothing of stealing (from anybody regardless of wealth) and whining about how little they have while living on substantial State handouts, yet I hesitate to brand all poor with the same brush.

shafted wrote:...What a strange world you inhabit if you think the rich all work hard for and deserve their wealth and the poor, well of course it's all their own fault they have no money, too stupid and lacking in aspiration...
That isn't what I've said or think.

Most wealthy people have worked hard for their money, and those that have inherited hard forebears that probably worked hard for their money. The very richest people I've known have been hard workers, but how many of those people would have bothered to aspire and work so hard if they knew that their family wealth would be taxed to zero when they died?

It is their hard work and taxed income that has paid for the welfare and services of all society over the years

karma wrote:...saw a few things we would have liked, but no way were we prepared to pay GST when (for the time being) we can purchase similar items in Guernsey GST free...
GST is only 3%, prices vary from shop to shop in Jersey by over 60% for non-sale items I know of, so you can't pile the blame for high prices at the door of GST. That you decide to buy in Gsy. as a visitor to Jsy is your choice, are prices (regardless of GST) actually cheaper in Gsy as a rule?

karma wrote:...are these items really classed as a luxury item???? what next - food - a luxury????...
Is healthcare a luxury? is waste disposal? policing? education? These are the things GST pays for that don't have a cost at the point of delivery.

karma wrote:...well perhaps someone can come up with and alternative...
Perhaps they will, but until they do GST is the least worst option for Jersey as a whole.

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Re: GST could go above 3%, warns Chief Minister

Post by Thistle on Tue 17 Feb 2009, 7:49 am

if the islands hadn't gone down the route of zero/ten then we would'nt be having to fund all the services via extra taxes.at least dick turpin had a mask.as i have said before the islands governments don't care about the working man all they care about is finance and the idle rich.
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Re: GST could go above 3%, warns Chief Minister

Post by Thistle on Tue 17 Feb 2009, 7:53 am

Troy McClure wrote:
You assume I'm wealthy; you know what they say about assumption?




the reason for the assumption is the way you always berate people on lower incomes troy.you always feel the need to say how wonderful and hard done by the idle rich of the islands are.they are the ones who are given all the tax breaks .the ones who increased prices affect the least.its a true saying the rich get richer and the poor get poorer.


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Re: GST could go above 3%, warns Chief Minister

Post by Fast Robert on Tue 17 Feb 2009, 9:05 am

Not all rich people are tossers, but the idle rich who tend to be in influential circles tend to want things to go their way, and more often than not that's exactly what happens.

I don't think that everyone should have the same amount of money regardless of talent, work or luck. That would be counterproductive. However, there needs to be more control over wealth. The explosion of the finance industry in the islands has grossly distorted the standard of living. Those at the top, who do not necessarily work any harder or are of any greater benefit to society as a whole, are able to milk the system for their own ends. They buy up prime land, seclude themselves, and offer little. I'm in Guernsey and you only have to walk around the dead village of Fort George to witness the waste. Wealth in itself is sterile. It needs to be used to progress society. Hoarding it and funneling it upwards to the few, who in turn concentrate it further through the generations leads to nothing but social division and ultimately social unrest. It breeds crime.

Who said about giving estates away to the poor? You mustn't make assumptions! What needs to occur is that inheritance tax drives down market prices for houses. A house is a home, not an investment. By not factoring in any imposed corrections, all property will end up in the hands of the few, who are quite happy to maintain the distortions so they can charge higher rents and get bigger profits.

The systems we have lived in, first feudal, and now this Friedman inspired capitalism have failed society. Look at the state of the UK. There is no longer any pride in humble communities, it's all about achieving individual wealth with this mantra of 'securing' the future and choice for your offspring. The problem is that there is only a finite amount of wealth kicking about, so ythat individualism comes at a high price.

Guernsey is failing its people. Decades of underinvestment in capital projects caused by appeasing the high net worths means that we are having to pay for it by stealth taxes, rather than the much more acceptable to all general revenue. It's just that those in power are constantly whispered to by those who have the actual power to maintain the inbalances.

A perfect example was when a Deputy suggested that the SI cap get removed. The guffaws of derision from certain well connected members was sickening. It's very, very sad that in our times of need we have the dinosaurs of a failed age still able to belittle sensible progressives. Twas ever thus, mind, I was just hoping that we had advanced since the middle ages.
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Re: GST could go above 3%, warns Chief Minister

Post by karma on Tue 17 Feb 2009, 12:10 pm

GST is only 3%, prices vary from shop to shop in Jersey by over 60% for non-sale items I know of, so you can't pile the blame for high prices at the door of GST. That you decide to buy in Gsy. as a visitor to Jsy is your choice, are prices (regardless of GST) actually cheaper in Gsy as a rule?

The Channel Islands as a whole are a farce as far as VAT and GST are concerned. Most of the English shops - Next, New Look, Evans to name but a few- charge VAT in the guise of 'freightage' - and our 'powers that be' are powerless to do anything about it...so in Jersey you are in effect paying twice - I saw several shops declaring themselves GST free - they forget to add, but VAT is still added....at least buying in Guernsey you are only paying 'freight' for the time being!!!! As someone on a fixed income (pension) I now buy online, first checking with the firm that they take off the VAT before it comes over......I then pay postage, which is usually much cheaper, even when it's sent by courier!!!
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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Wed 18 Feb 2009, 1:15 am

Thistle wrote:...you always berate people on lower incomes troy...
Where have I berated anybody for being on a low income?
karma wrote:...Most of the English shops - Next, New Look, Evans to name but a few- charge VAT in the guise of 'freightage'...
An often repeated, but false or at best unproven statement. I know of no UK or international branded stores that charge VAT in Jersey at least.

karma wrote:...I saw several shops declaring themselves GST free...
The false representation of 'GST free' stores is something that annoys me too. Our local paper's 'Fair Play' column often uses Hallmark Cards in Halkett place as a shining example of a retailer due to its large posters claiming it to be GST free... only it's not, it's a lie.

karma wrote:...I now buy online...
I don't blame you, but you do realise that online shopping is destroying the local retail sector, along with the local jobs and taxes that go with it.

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Re: GST could go above 3%, warns Chief Minister

Post by Troy McClure on Wed 18 Feb 2009, 1:22 am

Fast Robert wrote:...Who said about giving estates away to the poor? You mustn't make assumptions!...
You, here:
Fast Robert wrote:...I'm all in favour of 100% inheritance tax...
or did you intend not to use these tax revenues to fund welfare etc.

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Re: GST could go above 3%, warns Chief Minister

Post by Thistle on Wed 18 Feb 2009, 7:24 am

Troy McClure wrote:

Many of those on low incomes (myself excluded) are looked after very well by the higher income tax-payers through the States, and while the best idea would be for the States to become more efficient and less wasteful with those hard-earned taxes, maybe the 'poor' should accept that they should be grateful for any help they get rather than moaning they can't afford the latest mobile phone or the SKY sports package for the big screen TV.


will this do a perfect troyism
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