§ Mr. Hordern
asked the Chancellor of the Exchequer if he will publish a table showing the average rate of tax on pretax income for the following quantile groups: top 1 per cent., next 9 per cent., next 40 per cent., lower 50 per cent., and bottom 20 per cent. in the years 1952, 1964, 1970, 1974 and 1978.
§ Mr. Robert Sheldon
Information for 1978 is not available. The figures relating to 1952, 1964, 1970–71 and 1974–75 are given below.
§ Mr. David Mitchell
asked the Chancellor of the Exchequer when the average family on the average wage last did not pay income tax; and how much the average family on the average wage pay in income tax in the current year, or the most recent year for which figures are available.
§ Mr. Rippon
asked the Chancellor of the Exchequer what would be the cost in a full financial year if the maximum rate of income tax on (a) earned and (b) unearned income had been reduced to 70p, 65p, 60p, 55p and 50p in the pound.
§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 8 March 1979; Vol. 963, c. 775], gave the following information:
Income tax is charged on total taxable income regardless of the source, and there 375W are difficulties in distinguishing the proportion of tax relating to income from any one source. If it is assumed that earned income represents the bottom slice of taxable income, the estimated costs in a full year at 1978–79 income levels would be of the following order:
£ million Loss of Revenue Maximum rate Earned Income Unearned Income 70p 50 55 to 195 65p 80 90 to 255 60p 120 125 to 310 55p 175 165 to 380 50p 250 200 to 430
The lower figures quoted for the loss of revenue on unearned income assume no reduction in the yield from the investment income surcharge. The information available does not readily produce an estimate of the amount of surcharge payable as a component of any particular marginal rate of tax. The higher figures quoted includes estimates of the investment income surcharge paid by all those affected by the reduction in the maximum rate of tax, including that paid on slices on income taxed at rates below the maximum rate.
The true loss of revenue therefore lies between the lower and upper figures.