Cutting VAT is not a way to make the tax system more progressive.

The cost is huge: a 5% cut = £32bn

It's inefficient, because businesses will retain some of the saving & not cut prices

And, where prices are cut, which customers will benefit the most? Those that spend the most https://twitter.com/guardianopinion/status/1275068532229726210

The nasty trick is that VAT is assymetric: if VAT goes up then most or all of the cost is passed by businesses to consumers. But if VAT goes down then businesses retain some or even most of the benefit. See e.g. https://voxeu.org/article/assessing-incidence-value-added-taxes

So it may be that raising VAT is regressive AND cutting VAT is regressive.

VAT is fun. End of thread.