§ 13. Sir B. Rhys Williamsasked the Chancellor of the Exchequer what practical study he has made of the disincentive effects of income tax at various levels of income and marginal rates of incidence.
§ Mr. MacmillanA number of studies of this question have been made over the years and the results have been considered by the Government.
§ Sir B. Rhys WilliamsWill my hon. Friend consider publishing these surveys in detail? Will he bear in mind particularly that a marginal tax rate of 6s. 5d. for the average man is bad enough but that withdrawal of spending power at the top and bottom of society well in excess of 10s. in the £ is certainly disincentive?
§ Mr. MacmillanWe are keeping the question of disincentive very closely under review and are keeping in touch with those working in the universities on 1098 this subject, but I do not think that the pattern and the conclusions are firm enough to warrant publication at this stage.
§ Mr. Hugh JenkinsIs the hon. Gentleman aware that the 6d. reduction in income tax announced by his right hon. Friend is equivalent to a 28 per cent. increase in gross income at the higher levels of remuneration? If this is not inflationary, why not?
§ Mr. MacmillanBecause, as the hon. Gentleman knows very well, this still leaves people at the higher end of the earned income scale paying a much greater proportion of their income in tax than anyone else, and still facing a very high tax bill.