§ Dr. McDonald
asked the Chancellor of the Exchequer how many taxpayers are subject on earned income to (a) the reduced rate of band of tax, (b) the standard rate of tax and (c) each of the higher rates of tax, showing married couples counting as one, and earning wives counted separately.
§ Mr. Peter Rees
[pursuant to his reply, 10 March 1980]; The estimates at 197980 income levels are as follows:
Marginal rate of tax on earned income (percentage) Estimated number of tax units (thousands) Earning wives (thousands) 25 2,490 1,400 30 17,470 3,200 40 210 200 45 120 50 70 55 30 60 30 Total 20,420 4,800
Since income tax is levied on income regardless of source, there are difficulties in allocating tax liabilities to earned or investment income. The answer relates to the top rate on earned income, treating any investment income as the top slice of total income.
The first column gives figures for tax units, either single persons or married couples. Where one spouse pays tax on earnings at a higher rate than the other, the higher of the two rates is taken to be the marginal rate.
The second column gives figures separately for earning wives, but the allocation to individual higher rates is not readily available.