11-05-2011, 08:15 PM
(11-05-2011, 08:39 AM)AlanBeckett Wrote: David,
The one thing I would query is the multiplier. I reckon '64 to now is probably nearer 40 for some items, although it does depend on which ones. I was thinking of beer
Alan
Yes, it's very diffcult to use meaningful data to make comparisons over time, and there are several historical inflation calculators on internet which use a range of factors, resulting in often widely different results. Individual commodities are at the mercy of taxation plicies - beer and ciggies being just two!. The index that I mentioned seems not to be too far out. The Retail Prices Index (RPI) inflation measure is used in that index — the historical inflation data come from the 2004 paper ‘Consumer Price Inflation Since 1750’ (ISSN 0013-0400, Economic Trends No. 604, pp 38-46) by Jim O’Donoghue, Louise Goulding, and Grahame Allen, which estimates historic British inflation back to 1750.
Of course, one of the major factors affecting radios and other consumer elctronics was Purchase Tax, introduced in Oct 1940 on "luxuries" (i.e. anything other than food and real essentials) at a then gob-smacking 33.3%, to raise revenue for the war efforts and to curb spending on non-necessities in wartime, when the motto was 'wear it out or do without'. Although intended as a temporary tax it continued until 1973,after which it was replaced by VAT as a necessary condition of entry to the EEC. Purchase Tax had been levied at different rates depending on an item's perceived "luxury" by the standards of the day. Cars, radios, TVs etc were all considered 'luxuries'. Initially, UK VAT was set at a standard rate of 10%. Almost immediately, the standard rate was shaved to 8% and joined by a higher rate of 12.5% for petrol and certain luxury goods. By the end of the decade both rates had been "harmonised" at 15%, which is where VAT stayed until the 1991-92 tax year, when the government nudged it upwards to 17.5%, and there it has stayed for the best part of two decades.
Every nation in the European Union is legally required to impose a minimum VAT rate. At present, standard VAT rates in Europe can't legally be any lower than 15%. Historically, European VAT rates have moved in one direction – up. When first introduced in Germany, VAT started out at 10%; it's now 19%. The VAT rate in France is now 19.6%, up from an initial rate of 13.6%. If the UK's new rate of 20%seems high, Danes and Swedes, have to fork out 25% in VAT on the majority of their purchases. It's still much lower than the Purchase Tax pre 1974!
Sorry to drift right off topic, but it is worth remembering that the selling price of Heathkits and other radio gear included 33% Purchase Tax, though 'communications' receivers with a BFO were, I believe, not consdered luxury goods so were PT exempt.
David
