Letter: Tax on the rich

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Sir: In his letter (19 October) about poverty, Bill Smith deplores the shift from direct to indirect taxation and takes a swipe at VAT which "hits rich and poor" alike.

Unfortunately he overlooks the fact that VAT does not apply to a range of essential items including food (except when consumed on the premises), children's clothing, public transport, books and newspapers. Nor is there VAT on water, although there is (for environmental reasons and now at only 5 per cent) on electricity and gas. Amazingly, even the Tories left intact this gesture towards need despite pressure from the EU - the same does not apply uniformly in other countries.

One could argue for ever that many other items could easily be considered as essential, but few would dispute those listed above. It follows that VAT could be claimed to be a tax on the rich, who are the only people able to afford goods which do not feature on the exempt list.


London SE27