Income Tax (Hansard, 21 December 1979)

§ Mr. Ralph Howell
asked the Chancellor of the Exchequer if he will publish a table showing the gross income levels, in local currencies and in sterling equivalent, at which income tax becomes

GROSS INCOME LEVEL AT WHICH INCOME TAX BECOMES PAYABLE ON THE NEXT POUND OF INCOME AT 50 PER CENT. (OR NEAREST RATE) BY A MARRIED COUPLE WITH TWO CHILDREN

Country Local currency Sterling equivalent Rate

£ Per cent

United Kingdom … 16,816 50.0

United States of America … $64,000 29,630 50.0

France … 443,845 F 49,940 49.5

Germany … 121,860 DM 32,195 50.0

Japan … 25,223,500 Yen 46,495 49.5

Notes:

1. Conversions to sterling were made at the exchange rates prevailing in London on 26 November 1979. Such conversions may not reflect differences in domestic purchasing power between the United Kingdom and individual foreign currencies.

2. The income is assumed throughout to be wholly employment income of the husband.

3. Personal reliefs, minimum expenses, employment income reliefs and other flat rate reliefs have been taken into account, as have deductible social security contributions.

4. Figures are for the tax year 1979 or 1979–80, except for France (1978) which fixes its rates in arrear at the end of the income tax year.

5. The figures do not take into account local income taxes.

§ Mr. Ralph Howell
asked the Chancellor of the Exchequer if he will publish a table showing the gross income levels, in local currencies and in sterling equivalent, at which income tax plus compulsory social security contributions becomes

GROSS INCOME LEVEL AT WHICH INCOME TAX PLUS COMPULSORY SOCIAL SECURITY CONTRIBUTIONS BECOMES PAYABLE ON THE NEXT POUND OF INCOME AT 50 PER CENT. (OR NEAREST RATE) BY A MARRIED COUPLE WITH TWO CHILDREN

Country Local currency Sterling equivalent Rate

£ Per cent.

United Kingdom … 16,816 50.0

United States of America … $64,000 29,630 50.0

France … 443,845 F 49,940 50.2

Germany … 121,860 DM 32,195 50.0

Japan … 25,223,500 Yen 46,495 49.7

Notes:

1. Conversions to sterling were made at the exchange rates prevailing in London on 26 November 1979. Such conversions may not reflect differences in domestic purchasing power between the United Kingdom and individual foreign currencies.

2. The income is assumed throughout to be wholly employment income of the husband.

3. Personal reliefs, minimum expenses, employment income reliefs and other flat rate reliefs have been taken into account, as have deductible social security contributions.

4. Figures are for the tax year 1979 or 1979–80. except for France (1978) which fixes its rates in arrear at the end of the income tax year.

5. The figures do not take into account local income taxes.

6. In the United Kingdom, the United States of America and Germany the marginal rates for income tax plus social security contributions are the same as those for income tax only. This is because there are no additional social security contributions payable at these income levels in these countries.

§ Mr. Ralph Howell
asked the Chancellor of the Exchequer if he will publish a table comparing the starting rates and the top rates of income tax in each of 440W payable at 50 per cent. by a married couple with two children, in the United Kingdom, the United States of America, France, Germany and Japan.

§ Mr. Peter Rees
The information requested is given in the table below:
payable at 50 per cent. by a married couple with two children, in the United Kingdom, the United States of America, France, Germany and Japan.

§ Mr. Peter Rees
The information requested is given in the table below:
the United Kingdom, Germany, Netherlands, Canada, Denmark, the United States of America, Belgium, France and Japan.
441W

§ Mr. Peter Rees
The information requested is given in the table below:

Starting rate of income tax Top rate of income tax

United Kingdom … … … … … 25.0 60.0

Germany … … … … … 22.0 56.0

Netherlands … … … … … 19.2 72.0

Canada … … … … … 15.5 43.0

Denmark … … … … … 14.4 39.6

United States of America … … … … … 14.0 50.0

Belgium … … … … … 14.2 72.0

France … … … … … 7.2 60.0

Japan … … … … … 6.0 67.5

Notes:

1. The rates are those for the tax year 1979 or 1979–80, but the French rates are provisional (French tax rates are fixed in arrear).

2. All figures relate to national or federal tax only. In Canada, Denmark, the United States of America, Belgium and Japan there are also local income taxes. Sample starting rates and top rates of local income taxes on employment income are:

Starting rate Per cent. Top rate Per cent.

Canada (the Ontario rate) 2.6 18.9

Denmark (the Copenhagen rate) 25.5 25.5

United States of America (the Californian rate) 4.0 11.0

Belgium (the rate applicable to the great majority of the population) 0.9 4.3

Japan (the rate applicable to the great majority of the population) 2.4 16.2

In the United States of America local income taxes are deductible in computing taxable income for federal income tax purposes.

3. Figures relate to employment income only. The starting rate of tax on investment income in the Netherlands is 20 per cent. And in France 10 per cent. The top rate of tax on investment income in the United Kingdom is 75 per cent., in the United States of America 70 per cent. (excluding local income tax) and in Japan 75 per cent. (excluding local income tax).

4. All figures relate to a married man with two children, except for the United States of America where a single man begins to pay tax at the rate shown. The starting rate in the United States of America for a married man with two children is 26.5 per cent. (excluding local income tax) because of the progressive withdrawal of tax credits for such a man at this income level.

5. The starting and top rates are those applicable, respectively when tax actually becomes payable (excluding, in the case of Belgium the first £160 taxable income which is taxed at an unusually high rate) and when the highest point of the scale of income tax rates is reached. These actual rates, which take account of the operation of employment income reliefs and minimum expenses deductions, differ from nominal rates in some countries.

§ Mr. Field
asked the Chancellor of the Exchequer if he will detail the increases in the percentage of income paid in tax and national insurance contributions for a single person, a married couple and a married couple with two children when earning (a) two-thirds of average earnings, (b) average earnings, (c) twice average earnings, (d) five times average earnings, and (e) 10 times average earnings from 1964–65 to the latest available date.

§ Mr. Peter Rees
The figures are shown in the following tables.
For years up to 1969–70 the average earnings are the annual equivalents of the average weekly earnings of males aged 21 and over in manufacturing and certain other industries at October in each year. For 1970–71 to 1978–79 the figures are based on the averages of the new earnings survey estimates of the 442W average earnings of full time adult male manual workers at the start and finish of each tax year. To give an estimate for 1979–80 the April 1979 NES figure has been updated to September 1979 taking account of movements in a centred three-month moving average of the whole economy index of average earnings of all employees. In the case of the married man with two children, the figures of income include family allowance or child benefit, as appropriate, in addition to earnings.
It has been assumed that the employees were not contracted out of the earnings-related or graduated pension schemes.
It has been assumed that married men with children would relinquish family allowance between 1968–69 and 1976–77 if on 10 times average earnings and between 1970–71 and 1976–77 if on five times average earnings.
443W
Figures for a single man are as follows

Percentage of income paid in Tax and NIC

Two-thirds average earnings Average earnings Twice average earnings Five times average earnings Ten times average earnings

Year Tax NIC Tax NIC Tax NIC Tax NIC Tax NIC

Per cent. Per cent. Per cent Per cent Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.

1964–65 … … … 11.1 5.9 17.2 5.3 23.6 2.7 28.2 1.1 39.4 0.5

1965–66 … … … 12.3 6.6 18.9 5.4 25.5 2.7 30.6 1.1 44.4 0.5

1966–67 … … … 13.0 6.6 19.3 5.5 25.7 2.8 31.1 1.1 44.5 0.6

1967–68 … … … 13.9 6.8 20.0 5.8 26.0 2.8 31.8 1.1 45.9 0.6

1968–69 … … … 15.2 7.4 20.8 5.6 26.5 2.9 33.0 1.1 48.1 0.6

1969–70 … … … 16.5 7.5 21.7 5.7 26.9 3.0 34.3 1.2 50.3 0.6

1970–71 … … … 18.3 7.1 22.9 5.9 27.5 3.0 36.4 1.2 54.0 0.6

1971–72 … … … 18.5 6.8 22.4 5.8 26.2 3.3 35.2 1.3 48.8 0.7

1972–73 … … … 15.6 6.6 20.5 5.9 25.3 3.6 37.7 1.4 53.4 0.7

1973–74 … … … 17.4 6.4 21.6 5.9 25.8 3.6 37.3 1.4 52.2 0.7

1974–75 … … … 21.0 6.2 25.0 5.9 29.0 3.5 44.4 1.4 60.2 0.7

1975–76 … … … 23.7 5.5 27.5 5.5 32.6 3. 50.3 1.3 65.4 0.6

1976–77 … … … 24.1 5.8 27.8 5.8 33.0 4.0 52.2 1.6 66.9 0.8

1977–78 … … … 21.8 5.8 25.9 5.8 30.7 4.0 50.4 1.6 66.3 0.8

1978–79 … … … 20.2 6.5 24.5 6.5 28.8 4.5 48.8 1.8 65.5 0.9

1979–80 … … … 18.8 6.5 22.5 6.5 26.3 4.4 39.4 1.8 49.7 0.9

444W 445W

Figures for married couples without children are as follows:

Percentage of income paid in Tax and NIC

Two-thirds Twice Five times Ten times

average earnings Average earnings average earnings average earnings average earnings

Year Tax NIC Tax NIC Tax NIC Tax NIC Tax NIC

Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.

1964–65 … … … 5.4 5–9 12.2 5.3 21.2 2.7 27.2 1.1 38.6 0.5

1965–66 … … … 6.8 6.6 14.0 5.4 23.1 2.7 29.5 1.1 43.5 0.5

1966–67 … … … 7.4 6.6 14.7 5.5 23.4 2.8 29.9 1.1 43.6 0.6

1967–68 … … … 8.2 6.8 15.5 5.5 23.8 2.8 30.7 1.1 45.1 0.6

1968–69 … … … 9.3 7.4 16.7 5.6 24.4 2.9 31.9 1.1 47.3 0.6

1969–70 … … … 10.7 7.5 17.8 5.7 25.0 3.0 33.2 1.2 49.6 0.6

1970–71 … … … 12.4 7.1 18.9 5.8 25.5 3.0 35.2 1.2 53.2 0.6

1971–72 … … … 13.4 6.8 19.0 5.8 24.6 3.3 34.1 1.3 48.1 0.7

1972–73 … … … 11.2 6.6 17.5 5.9 23.8 3.6 36.6 1.4 52.7 0.7

1973–74 … … … 13.6 6.4 19.0 5.9 24.5 3.6 36.4 1.4 51.5 0.7

1974–75 … … … 16.4 6.2 21.9 5.9 27.5 3.5 43.1 1.4 59.4 0.7

1975–76 … … … 19.0 5.5 24.4 5.5 30.6 3.1 49.0 1.3 64.6 0.6

1976–77 … … … 19.0 5–8 24.3 5.8 30.7 4.0 50.7 1.6 66.1 0.8

1977–73 … … … 15.2 5.8 21.5 5.8 28.1 4.0 48.5 1.6 65.2 0.8

1978–79 … … … 14.2 6.5 20.5 6.5 26.7 4.5 47.0 1.8 64.5 0.9

1979–80 … … … 13.1 6.5 18.7 6.5 24.4 4.4 38.0 1.8 48.9 0.9

446W 447W
Figures for married couples with two children aged under 11 are as follows:

Percentage of income paid in Tax and NIC

Year Two-thirds average earnings Average earnings Twice average earnings Five times average earnings Ten times average earnings

Tax Percent. NIC Per cent. Tax Per cent. NIC Per cent. Tax Per cent. NIC Per cent. Tax Per cent. NIC Per cent. Tax Per cent. NIC Per cent.

1964–65 … … … — 5.7 4.5 5.2 16.3 2.6 25.3 1.1 37.0 0.5

1965–66 … … … — 6.4 5.9 5.3 18.5 2.7 27.6 1.1 41.8 0.5

1966–67 … … … — 6.4 6.5 5.4 19.0 2.7 27.9 1.1 42.1 0.5

1967–68 … … … 0.6 6.7 7.4 5.7 19.6 2.8 28.7 1.1 43.7 0.6

1968–69 … … … 3.1 7.0 10.8 5.4 21.2 2.8 30.2 1.1 45.6 0.6

1969–70 … … … 4.7 7.1 12.5 5.0 22.1 2.9 30.9 1.2 48.0 0.6

1970–71 … … … 5.7 6.8 14.2 5.7 23.3 3.0 33.4 1.2 51.7 0.6

1971–72 … … … 4.9 6.5 13.1 5.6 21.5 3.2 31.8 1.3 46.4 0.7

1972–73 … … … 3.8 6.4 12.3 5.8 21.1 3.5 34.3 1.4 51.0 0.7

1973–74 … … … 7.1 6.2 14.6 5.8 22.2 3.5 34.3 1.4 50.0 0.7

1974–75 … … … 8.9 6.1 16.8 5.8 24.8 3.5 40.7 1.4 57.8 0.7

1975–76 … … … 12.7 5.3 20.0 5.4 27.4 3.1 46.9 1.3 63.2 0.6

1976–77 … … … 11.6 5.6 19.3 5.6 27.4 4.0 48.2 1.6 64.6 0.8

1977–78 … … … 10.0 5.5 17.8 5.6 25.8 3.9 46.8 1.6 64.2 0.8

1978–79 … … … 11.0 6.0 17.9 6.1 25.2 4.4 45.8 1.8 63.7 0.9

1979–80 … … … 11.7 5.8 17.3 6.0 23.4 4.2 37.4 1.7 48.5 0.9

448W

GROSS INCOME LEVEL AT WHICH INCOME TAX BECOMES PAYABLE ON THE NEXT POUND OF INCOME AT 50 PER CENT. (OR NEAREST RATE) BY A MARRIED COUPLE WITH TWO CHILDREN
Country	Local currency	Sterling equivalent	Rate
			£	Per cent
United Kingdom	…		16,816	50.0
United States of America	…	$64,000	29,630	50.0
France	…	443,845 F	49,940	49.5
Germany	…	121,860 DM	32,195	50.0
Japan	…	25,223,500 Yen	46,495	49.5
Notes:
1. Conversions to sterling were made at the exchange rates prevailing in London on 26 November 1979. Such conversions may not reflect differences in domestic purchasing power between the United Kingdom and individual foreign currencies.
2. The income is assumed throughout to be wholly employment income of the husband.
3. Personal reliefs, minimum expenses, employment income reliefs and other flat rate reliefs have been taken into account, as have deductible social security contributions.
4. Figures are for the tax year 1979 or 1979–80, except for France (1978) which fixes its rates in arrear at the end of the income tax year.
5. The figures do not take into account local income taxes.

GROSS INCOME LEVEL AT WHICH INCOME TAX PLUS COMPULSORY SOCIAL SECURITY CONTRIBUTIONS BECOMES PAYABLE ON THE NEXT POUND OF INCOME AT 50 PER CENT. (OR NEAREST RATE) BY A MARRIED COUPLE WITH TWO CHILDREN
Country	Local currency	Sterling equivalent	Rate
			£	Per cent.
United Kingdom	…		16,816	50.0
United States of America	…	$64,000	29,630	50.0
France	…	443,845 F	49,940	50.2
Germany	…	121,860 DM	32,195	50.0
Japan	…	25,223,500 Yen	46,495	49.7
Notes:
1. Conversions to sterling were made at the exchange rates prevailing in London on 26 November 1979. Such conversions may not reflect differences in domestic purchasing power between the United Kingdom and individual foreign currencies.
2. The income is assumed throughout to be wholly employment income of the husband.
3. Personal reliefs, minimum expenses, employment income reliefs and other flat rate reliefs have been taken into account, as have deductible social security contributions.
4. Figures are for the tax year 1979 or 1979–80. except for France (1978) which fixes its rates in arrear at the end of the income tax year.
5. The figures do not take into account local income taxes.
6. In the United Kingdom, the United States of America and Germany the marginal rates for income tax plus social security contributions are the same as those for income tax only. This is because there are no additional social security contributions payable at these income levels in these countries.

	Starting rate of income tax	Top rate of income tax
United Kingdom	…	…	…	…	…	25.0	60.0
Germany	…	…	…	…	…	22.0	56.0
Netherlands	…	…	…	…	…	19.2	72.0
Canada	…	…	…	…	…	15.5	43.0
Denmark	…	…	…	…	…	14.4	39.6
United States of America	…	…	…	…	…	14.0	50.0
Belgium	…	…	…	…	…	14.2	72.0
France	…	…	…	…	…	7.2	60.0
Japan	…	…	…	…	…	6.0	67.5
Notes:
1. The rates are those for the tax year 1979 or 1979–80, but the French rates are provisional (French tax rates are fixed in arrear).
2. All figures relate to national or federal tax only. In Canada, Denmark, the United States of America, Belgium and Japan there are also local income taxes. Sample starting rates and top rates of local income taxes on employment income are:

	Starting rate Per cent.	Top rate Per cent.
Canada (the Ontario rate)	2.6	18.9
Denmark (the Copenhagen rate)	25.5	25.5
United States of America (the Californian rate)	4.0	11.0
Belgium (the rate applicable to the great majority of the population)	0.9	4.3
Japan (the rate applicable to the great majority of the population)	2.4	16.2
In the United States of America local income taxes are deductible in computing taxable income for federal income tax purposes.
3. Figures relate to employment income only. The starting rate of tax on investment income in the Netherlands is 20 per cent. And in France 10 per cent. The top rate of tax on investment income in the United Kingdom is 75 per cent., in the United States of America 70 per cent. (excluding local income tax) and in Japan 75 per cent. (excluding local income tax).
4. All figures relate to a married man with two children, except for the United States of America where a single man begins to pay tax at the rate shown. The starting rate in the United States of America for a married man with two children is 26.5 per cent. (excluding local income tax) because of the progressive withdrawal of tax credits for such a man at this income level.
5. The starting and top rates are those applicable, respectively when tax actually becomes payable (excluding, in the case of Belgium the first £160 taxable income which is taxed at an unusually high rate) and when the highest point of the scale of income tax rates is reached. These actual rates, which take account of the operation of employment income reliefs and minimum expenses deductions, differ from nominal rates in some countries.

										Percentage of income paid in Tax and NIC
				Two-thirds average earnings	Average earnings	Twice average earnings	Five times average earnings	Ten times average earnings
Year	Tax	NIC	Tax	NIC	Tax	NIC	Tax	NIC	Tax	NIC
				Per cent.	Per cent.	Per cent	Per cent	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.
1964–65	…	…	…	11.1	5.9	17.2	5.3	23.6	2.7	28.2	1.1	39.4	0.5
1965–66	…	…	…	12.3	6.6	18.9	5.4	25.5	2.7	30.6	1.1	44.4	0.5
1966–67	…	…	…	13.0	6.6	19.3	5.5	25.7	2.8	31.1	1.1	44.5	0.6
1967–68	…	…	…	13.9	6.8	20.0	5.8	26.0	2.8	31.8	1.1	45.9	0.6
1968–69	…	…	…	15.2	7.4	20.8	5.6	26.5	2.9	33.0	1.1	48.1	0.6
1969–70	…	…	…	16.5	7.5	21.7	5.7	26.9	3.0	34.3	1.2	50.3	0.6
1970–71	…	…	…	18.3	7.1	22.9	5.9	27.5	3.0	36.4	1.2	54.0	0.6
1971–72	…	…	…	18.5	6.8	22.4	5.8	26.2	3.3	35.2	1.3	48.8	0.7
1972–73	…	…	…	15.6	6.6	20.5	5.9	25.3	3.6	37.7	1.4	53.4	0.7
1973–74	…	…	…	17.4	6.4	21.6	5.9	25.8	3.6	37.3	1.4	52.2	0.7
1974–75	…	…	…	21.0	6.2	25.0	5.9	29.0	3.5	44.4	1.4	60.2	0.7
1975–76	…	…	…	23.7	5.5	27.5	5.5	32.6	3.	50.3	1.3	65.4	0.6
1976–77	…	…	…	24.1	5.8	27.8	5.8	33.0	4.0	52.2	1.6	66.9	0.8
1977–78	…	…	…	21.8	5.8	25.9	5.8	30.7	4.0	50.4	1.6	66.3	0.8
1978–79	…	…	…	20.2	6.5	24.5	6.5	28.8	4.5	48.8	1.8	65.5	0.9
1979–80	…	…	…	18.8	6.5	22.5	6.5	26.3	4.4	39.4	1.8	49.7	0.9

Figures for married couples without children are as follows:
										Percentage of income paid in Tax and NIC
				Two-thirds			Twice	Five times	Ten times
				average earnings	Average earnings	average earnings	average earnings	average earnings
Year	Tax	NIC	Tax	NIC	Tax	NIC	Tax	NIC	Tax	NIC
				Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.	Per cent.
1964–65	…	…	…	5.4	5–9	12.2	5.3	21.2	2.7	27.2	1.1	38.6	0.5
1965–66	…	…	…	6.8	6.6	14.0	5.4	23.1	2.7	29.5	1.1	43.5	0.5
1966–67	…	…	…	7.4	6.6	14.7	5.5	23.4	2.8	29.9	1.1	43.6	0.6
1967–68	…	…	…	8.2	6.8	15.5	5.5	23.8	2.8	30.7	1.1	45.1	0.6
1968–69	…	…	…	9.3	7.4	16.7	5.6	24.4	2.9	31.9	1.1	47.3	0.6
1969–70	…	…	…	10.7	7.5	17.8	5.7	25.0	3.0	33.2	1.2	49.6	0.6
1970–71	…	…	…	12.4	7.1	18.9	5.8	25.5	3.0	35.2	1.2	53.2	0.6
1971–72	…	…	…	13.4	6.8	19.0	5.8	24.6	3.3	34.1	1.3	48.1	0.7
1972–73	…	…	…	11.2	6.6	17.5	5.9	23.8	3.6	36.6	1.4	52.7	0.7
1973–74	…	…	…	13.6	6.4	19.0	5.9	24.5	3.6	36.4	1.4	51.5	0.7
1974–75	…	…	…	16.4	6.2	21.9	5.9	27.5	3.5	43.1	1.4	59.4	0.7
1975–76	…	…	…	19.0	5.5	24.4	5.5	30.6	3.1	49.0	1.3	64.6	0.6
1976–77	…	…	…	19.0	5–8	24.3	5.8	30.7	4.0	50.7	1.6	66.1	0.8
1977–73	…	…	…	15.2	5.8	21.5	5.8	28.1	4.0	48.5	1.6	65.2	0.8
1978–79	…	…	…	14.2	6.5	20.5	6.5	26.7	4.5	47.0	1.8	64.5	0.9
1979–80	…	…	…	13.1	6.5	18.7	6.5	24.4	4.4	38.0	1.8	48.9	0.9