Class War to Ding UK Luxury Car Sales

Robert Farago
by Robert Farago
class war to ding uk luxury car sales

Newsflash: the United Kingdom has just raised their top tax rate from 40 to 50 percent. That’s before (after?) the country’s 17.5 percent VAT on virtually everything a resident buys—save petrol, alcohol, cigarettes and other items covered by “sin taxes,” which are WAY higher. And council tax. And the rest. Which includes the tax on new car purchases. For company director types, that little item was calculated at 35 percent for the first £80K. After that, nada. But now, it’s 35 percent on the whole schmeer: the complete purchase price. The Times reports that “The move left some luxury-car makers fuming, in particular Bentley, which is owned by Volkswagen but has its factory in Crewe.”

Stuart McCullough, sales and marketing director, said: “The government has talked about the importance of high-skill manufacturing to the postrecession UK economy. Changes to company-car tax, capital allowances and fuel duty will hit higher-value vehicles worst of all and two-thirds of these cars are British in name and manufacture.

“It is frustrating that we asked the government for support but the Treasury has instead made it even tougher. We would urge them to reconsider some of these measures, especially the changes to company-car-tax upper limits.”

The new tax regime inflames old divisions, as this quote re: a potential exodus of top earners [from the first article] proves.

Let them go. Let them leave.

The same people who’ve never experienced £100,000 a year will still be here.

The teachers, the firemen, the nurses, even many doctors don’t get to that rate.

In fact, if all the wealthy leave, we’ll even have more houses back from the buy-to-let greed of late.


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  • Reclusive_in_nature Reclusive_in_nature on Apr 27, 2009

    Read the article. I couldn't help but notice that the author claims that it'd have to be raised to 34% to "bring the same revenue as the taxes it would replace". Translation: Less money for Uncle Sam. As a proponent of smaller/more efficient government I like the idea. That same article goes on to say "Moreover, even FairTax critics like Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent." The only real gripe I read was that those making more than 200k might not have to pay as much in taxes. Boohoo. Maybe they'll utilize that extra money for job creation. Either way there's still plenty of people making that much money who'll blow most of it on extravagant things, and thus contribute plenty of revenue to the government.

  • Vvk Vvk on Apr 27, 2009

    Please, those people who are theoretically covered by the new tax rate do not pay any taxes anyway. They can afford to hire smart people who think up ways to do it.

  • Carsinamerica Carsinamerica on Apr 28, 2009

    @reclusive_in_nature : I did the read the article: that's why I recommended it. Where do you want to start to cut? You can't just use a changed tax code to starve the exchequer. Even if you reduced spending, and thus the rate, it is nonetheless true that a sales tax would shift the tax burden (as a percentage) more toward the middle class, benefitting the working poor (if the prebate were high enough) and the ueber-rich (with or without prebates). So, apparently you believe that middle-class Americans don't pay their fair share now? As for the rich creating jobs, I'll believe it when I see it. Supply-side economics is a shaky premise. Personally, I'd rather increase the *marginal* rates on people who can afford a Veyron rather than on those who struggle to pay a mortgage and a Camry. I suppose that makes me a big-government socialist, but that's alright. I do find the growth estimates for a sales tax interesting. It'd be nice, but, again, the goal of tax policy is never simple revenue generation, but social engineering, whether it's done by Republicans or Democrats. One last note: what FactCheck doesn't address, except tangentially, is the business of the government sending checks to everybody. If you really want to piss off the working poor and middle-class voters in this country, watch what happens when the government sends prebate checks to EVERYBODY, which means that Bill Gates, Warren Buffett, and Paris Hilton would all receive them. Do you want to imagine the outcry from that? In order for a NST/VAT proposal to be politically viable, that means that there would have to be an income test to determine eligibility for the prebate, with a ceiling somewhere around the $200K mark. THAT means retaining W-2s, 1040s, and the auditing power of the IRS (not to mention that the IRS would now be in the business of rigorously auditing the sales figures of businesses nationwide to ensure tax compliance). All of this just makes a sales tax a political non-starter.

  • MOT-Failure MOT-Failure on Apr 28, 2009

    As someone who has lived in the UK since birth, I really hope that this new higher tax rate does lead to many rich persons leaving these shores. If these rich people really care about their role in job creation, wealth "trickle-down" and their contribution to society, please take a one-way ticket to Mogadishu and work your magic there!