Is the new digital tax Philip Hammond is considering a good idea to rescue the high street?
Jack May, a columnist for Progress, says YES.
The high street is in serious trouble. This year alone weve seen retailers across the spectrum fall on hard times – Maplin to Mothercare, Poundworld to House of Fraser.
Part of that is down to the ever-growing competition bricks and mortar shops face from online giants like Amazon and Ebay, as consumers increasingly shop online. Traditional retailers are struggling to compete, and while some of that is a simple case of disruptors overturning existing markets, its hard to argue that the online titans dont have a significant tax advantage.
Crucially, Amazon and co do not face the same business rates as our high street shops. Business rates were raised for a second year running in April, and retailers are struggling to cope.
There have been calls for reform, but to no avail. So if MPs arent going to lower rates, its right that they consider other ways of taxing internet companies in order to level the playing field. Right now, this is only an idea, but if we want to save our high streets, something has to be done.
Read more: MPs concerned by business rates as worst year for high street looms
Chloe Westley, campaign manager at the TaxPayers Alliance, says NO.
While some people have the means to support their local high street shops by paying more, cheaper deals online help the poor enjoy what they otherwise could not.
If you have money, you can afford to pay more for the experience of going to a nice local book shop. But if youre struggling under the cost of living, buying that same book for a lower price online makes all the difference.
Websites like Amazon and EBay provide a service that is not only popular, but also makes life more affordable for those struggling to get by. Why would the government want to take that away from people by increasing the tax on these businesses?
The tax burden is approaching a 50-year high, and the bottom 10 per cent of earners already pay half of their income in tax. Instead of punishing the poorest in society by taking even more of their money, the government should be reducing the taxes on high street shops that cut so deeply into their margins.
Read more: Liberalise planning laws to save the high street, says Bill Grimsey report
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