§ Mr. Horamasked the Chancellor of the Exchequer (1) if he will estimate the increase between 1978–79 and 1983–84 in the share of gross earnings paid in total tax payments—income tax, national insurance contributions and indirect taxes less child benefit where applicable—for those on 75 per cent., 100 per cent. and 200 per cent. of national average earnings for single people, married couples and married couples with two children, in each case expressed as an increase in the standard rate of income tax to the nearest 0. using the assumptions contained in the Financial Statement and Budget Report forecast prepared by the Treasury;
(2) if he will estimate the increase between 1978–79 and 1983–84 in total tax payments— income tax, national insurance contributions and indirect taxes less child benefit where applicable—in constant prices for those on 75 per cent., 100 per cent. and 200 per cent. of national average earnings for single people, married couples, and married couples with two children, in each case expressed as an increase in the standard rate of income tax to the nearest 0.1 penny using the assumptions contained in the Financial Statement and Budget Report forecast prepared by the Treasury.
§ Mr. Ridley[pursuant to his reply, 18 April 1983, c. 52]: Estimates are as follows for those on 75 per cent. and 100 per cent. of average earnings. Comparable figures cannot be given for those on 200 per cent. of average earnings since indirect tax payments cannot be estimated reliably above one and a half times average earnings.
The definitions underlying these figures are set out in the notes to the answer to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 23 November 1982.—[Vol. 32, c. 418–20.]
Calculations of this kind are, of course, purely hypothetical and carry no policy implications. It is worth noting that with this particular form of calculation, a small change in tax payments for those whose incomes are not much above the tax threshold is "equivalent" to a very large rise in the basic rate, simply because only a small proportion of their income is taxable.
Although taxes have increased, taxpayers at all earnings levels whose earnings have gone up with the national average will have significantly higher real take-home pay in 1983–84 than in 1978–79.
103W
Increase in standard rate of income tax equivalent to: Single Married Married with 2 children (i) the increase in the real level of tax payments between 1978–79 and 1983–84 75 per cent. of average earnings 8.5 6.8 7.9 100 per cent. of average earnings 7.2 6.7 6.9 (ii) the increase in the proportion of gross income taken in tax payments between 1978–79 and 1983–84 75 per cent. of average earnings 4.3 1.6 3.8 100 per cent. of average earnings 3.1 2.1 3.0