alt Hacker Newsfrom the paper:
> even a roughly proportional VAT can still have significant equity implications for the poor – potentially pushing some households into poverty."
from your page:
> Elastic goods, i.e luxuries, shed demand as prices rise whilst inelastic goods like bread do not. This has the effect of refocusing the economy away from luxuries and toward inelastic necessities, which effectively makes VAT progressive, not regressive.
As someone who lives with a VAT rate of 20% on most goods (and 5% on other with 0% on most foods) it doesn't meaningfully direct away from luxury goods. Its just priced into things (and if your a build er o cash in hand, then you can make 20% extra)
Personally I would rather we look at "council houses" and making them much more universal. As that would be cheaper than UBI but have some of the same benefits.
It's priced in, yeah. As I said in the comment and in the post, VAT on its own is not nice. The paper also states:
> Nevertheless, any VAT increases, including VAT base broadening measures that impact the poor, should be accompanied by compensation measures for poorer households, such as targeted tax credits or benefit payments.
Which is essentially what I propose through UBI, I just have broader scope.