Income Tax (Hansard, 28 November 1977)

§ Mr. Lawson
asked the Chancellor of the Exchequer what would be the extra yield to the revenue in a full year of (a) increasing the basic rate of income tax to 40 per cent, (b) increasing the basic rate and the first higher rate to 45 per cent., and (c) increasing the basic rate and the first two higher rates to 50 per cent.

§ Mr. Robert Sheldon
The extra yields for 1977–78 would be approximately as follows:

£ million

(a) 2,750

(b) 5,100

(c) 7,450

§ Mr. Speed
asked the Chancellor of the Exchequer if he will list the percentage increase in United Kingdom taxes on 44W incomes seasonally adjusted and at constant prices, between the second quarter of 1970 and the first quarter of 1974 and between the first quarter of 1974 and the third quarter of 1977, respectively.

§ Mr. Robert Sheldon
Taxes on income are not measured in terms of constant prices.

§ Mr. Lawson
asked the Chancellor of the Exchequer if he will publish a table showing the combined total income tax and employees' compulsory social security contributions expressed as a percentage of total personal income, in both 1974 and 1975, for the following countries: Australia, Canada, France, West Germany, Japan, Sweden, the United Kingdom and the United States of America, respectively.

§ 5. Mr. Robert Sheldon,
pursuant to his reply [Official Report, 24th November 1977; Vol. 939, c. 849], gave the following answer:
The following is the information requested for 1974. Details of total personal income for 1975 are not yet available from international sources.

TABLE

Estimate of income tax and employees' social security contributions as a percentage of total personal income less employers' social security contributions

1974 percent.

Australia 15.4

Canada 17.3

France 9.9

West Germany 19.0

Japan —

Sweden 25.7

United Kingdom 19.0

USA (1973) 14.7

NOTES
1. Figures are taken from the United Nations Yearbook of National Accounts Statistics 1975 except those for social security contributions which are taken from OECD Revenue Statistics of Member Countries, 1965–1975. The figures in the table are estimated because the underlying data have been obtained from two sources using slightly different bases.
2. "Total personal income" is equivalent to current receipts of households as defined for the purposes of Standing Table XVI of the United Nations Yearfbook. It is a rather wider definition than that for taxable income: in particular, it includes social security contributions paid by employers—which are excluded from the figures in the table—pension contributions paid by employers, social security 45W benefits, and imputed rent of owner-occupied dwellings.
Japan. The United Nations Yearbook shows no personal income data for years after 1971.
Canada. The international sources do not break down total receipts of social security contributions into employers' contributions and employees' contributions. The rates of contributions suggest that the contributions are payable roughly half by each: the figure in the table is calculated on this basis; and is therefore a rough estimate only.
United States of America. The latest figures are for 1973.

Flow of money (1) Prices (2) Average earnings (3)

1971 Q1 … … … … … +0.8 +2.1 +2.7

2 … … … … … +4.4 +2.3 +1.9

3 … … … … … +4.0 +1.5 +2.8

4 … … … … … +2.0 +1.8 +1.7

1972 Q1 … … … … … +1.2 +1.5 +3.2

2 … … … … … +3.2 +0.8 +3.4

3 … … … … … +1.6 +2.7 +3.2

4 … … … … … +4.8 +2.4 +4.9

1973 Q1 … … … … … +8.4 +3.1 +2.0

2 … … … … … -1.3 +0.6 +4.0

3 … … … … … +3.0 +4.1 +2.9

4 … … … … … +3.0 +3.7 +3.0

1974 Q1 … … … … … -0.5 +5.9 -0.9

2 … … … … … +6.8 +5.3 +9.3

3 … … … … … +8.6 +5.6 +7.3

4 … … … … … +2.4 +4.4 +7.8

1975 Q1 … … … … … +6.6 +6.2 +5.1

2 … … … … … +6.7 +6.4 +5.0

3 … … … … … +4.8 +5.8 +6.3

4 … … … … … +5.2 +4.0 +3.8

1976 Q1 … … … … … +5.2 +2.4 +3.3

2 … … … … … +1.3 +4.2 +3.1

3 … … … … … +4.1 +3.3 +2.7

4 … … … … … +4.4 +4.1 +2.7

1977 Q1 … … … … … +1.8 +3.5 +2.8

2 … … … … … +4.4 +4.0 +1.8

Notes:
Col. (1) is equal to changes in the gross national product at current market prices.
Col. (2) is based on the implied deflator of total final expenditure which is the most appropriate available measure of price changes for comparison with the flow of money. It can be affected, however, by changes in the composition of expenditure from quarter to quarter.
Col. (3) is based on the monthly index of average earnings (Great Britain): all employees—old series. The figures for the first quarters of 1972 and 1974 were affected by industrial dispute in the coal mining industry.
Source: October 1977 issue of Economic Trends.

TABLE
Estimate of income tax and employees' social security contributions as a percentage of total personal income less employers' social security contributions
	1974 percent.
Australia	15.4
Canada	17.3
France	9.9
West Germany	19.0
Japan	—
Sweden	25.7
United Kingdom	19.0
USA (1973)	14.7

							Flow of money (1)	Prices (2)	Average earnings (3)
1971	Q1	…	…	…	…	…	+0.8	+2.1	+2.7
	2	…	…	…	…	…	+4.4	+2.3	+1.9
	3	…	…	…	…	…	+4.0	+1.5	+2.8
	4	…	…	…	…	…	+2.0	+1.8	+1.7
1972	Q1	…	…	…	…	…	+1.2	+1.5	+3.2
	2	…	…	…	…	…	+3.2	+0.8	+3.4
	3	…	…	…	…	…	+1.6	+2.7	+3.2
	4	…	…	…	…	…	+4.8	+2.4	+4.9
1973	Q1	…	…	…	…	…	+8.4	+3.1	+2.0
	2	…	…	…	…	…	-1.3	+0.6	+4.0
	3	…	…	…	…	…	+3.0	+4.1	+2.9
	4	…	…	…	…	…	+3.0	+3.7	+3.0
1974	Q1	…	…	…	…	…	-0.5	+5.9	-0.9
	2	…	…	…	…	…	+6.8	+5.3	+9.3
	3	…	…	…	…	…	+8.6	+5.6	+7.3
	4	…	…	…	…	…	+2.4	+4.4	+7.8
1975	Q1	…	…	…	…	…	+6.6	+6.2	+5.1
	2	…	…	…	…	…	+6.7	+6.4	+5.0
	3	…	…	…	…	…	+4.8	+5.8	+6.3
	4	…	…	…	…	…	+5.2	+4.0	+3.8
1976	Q1	…	…	…	…	…	+5.2	+2.4	+3.3
	2	…	…	…	…	…	+1.3	+4.2	+3.1
	3	…	…	…	…	…	+4.1	+3.3	+2.7
	4	…	…	…	…	…	+4.4	+4.1	+2.7
1977	Q1	…	…	…	…	…	+1.8	+3.5	+2.8
	2	…	…	…	…	…	+4.4	+4.0	+1.8