§ Mr. Rooker
asked the Chancellor of the Exchequer if he will publish the most recently available information he has as to the top income tax rates on (a) unearned and (b) earned income in all countries of the European Community, the United States of America, Canada and Japan; and whether he will also provide the latest available information on starting points and rates of income tax and social security contributions in European Economic Community countries.
§ Mr. Moore
[pursuant to his reply, 1 February 1984, c. 207–8]: The information requested is given in tables 1 and 2:
Table 1 Maximum rates of income tax—earned (employment) income per cent. Maximum rates of income tax—unearned income per cent. Belgium 72 (76.3) 72 (76.3) Denmark 39.6 (68.4) 39.6 (68.4) France 71.2 71.2 Germany 56 56 Greece 63.6 66.3 Ireland 65 65 Italy 65 65 (70.67) Luxembourg 62.7 62.7 Netherlands 72 72 United Kingdom 60 75 USA 50 (55.5) 50 (55.5) Canada 34 (50.7) 34 (50.7) Japan 71.25 (88.35) 75 (93)
- 1. The rates shown are those for 1983 (1983–84). The figures in brackets include local taxes at typical rates.
- 2. The rates for France, Luxembourg, Greece and Ireland include additional income taxes levied to fund various social security programmes.
Income Tax Threshold in National Currency Threshold in £ Sterling Rate of Income Tax Per cent. Rate of Income Tax and Social Security Contributions Per cent. Married Couple Belgium (Fr) 187,060 2,310 21.7 (23) 30.2(31.5) Denmark (Kr) 42,105 2,945 13.7 (39.1) 18.2 (43.6) France (F) 48,720 4,025 7.2 18.3 Germany (DM) 12,940 3,310 18 35.4 Greece (Dr) 227,100 1,565 7.6 15.9 Ireland (£Ir) 4,800 3,750 See note 6 See note 6 Italy (L) 5,474,520 2,280 18 24.1 Luxembourg (Lfr) 310,580 3,835 12.6 23.2 Netherlands (fl) 16,450 3,700 16.3 37 United Kingdom (£) 2,795 2,795 30 39 Married Couple with two Dependent Children (see note 7) Belgium (Fr) 287,285 3,510 22.05 (23.4) 29.9(31.1) Denmark (Kr) 42,105 2,945 13.7 (39.1) 18.2 (43.6) France (F) 70,930 5,860 7.2 18.3 Germany (DM) 14,120 3,575 18 35.4 Greece (Dr) 407,700 2,810 17.1 24.5 Ireland (£Ir) 4,800 3,750 See note 6 See note 6 Italy (L) 5,906,720 2,460 18 24.1 Luxembourg (Lfr) 482,590 5,960 12.6 23.2 Netherlands (fl) 16,450 3,700 16.3 37 United Kingdom (£) 2,795 2,795 30 39
- 1. Table 2 shows the income tax thresholds and the rate of income tax, and combined rate of tax and social security contributions payable on an income just above the threshold. In most European Community countries there is no single figure for social security contributions corresponding to the income tax threshold since different contribution arrangements often apply for different kinds of benefit. Contributions are generally due on the whole of any employment income regardless of size.
- 2. The thresholds and rates shown are those for 1983 (1983–84 in the case of the United Kingdom and Ireland). For Belgium, Greece and Italy the 1983 figures are provisional.
- 3. Conversions to sterling were made at the exchange rate prevailing in London on 31 January 1984. They may not fully reflect differences in purchasing power between sterling and other currencies.
- 4. The income for the married couple is assumed to be wholly employment income of the husband. It is assumed that the United Kingdom employee is contracted-in to the State pension scheme.
- 5. In computing the thresholds and rates account has been taken of personal reliefs, universal minimum expenses deductions, employment income reliefs and other standard reliefs, as well as income tax relief for social security contributions in certain countries.
- 6. The threshold figures for the single person, married couple and the married couple with two children in Ireland are exemption limits. Immediately above that limit income tax may not exceed 60 per cent. of the difference between total income and the exemption limit, if that is less than tax calculated on the normal basis. Since the ordinary personal allowances and other standard reliefs total less than the exemption limit the effective starting rate for an income just above the exemption limit is 60 per cent. (67.5 per cent. including social security contributions). The nominal starting rate of tax is 25 per cent. (32.5 per cent. including social security contributions).
- 7. The combined rate of income tax and social security contributions is the actual income tax rate plus the rate of compulsory social security contributions payable by employees with income at the income tax threshold level, adjusted (where appropriate) for income tax relief for the contributions.
- 8. The figures in brackets include local income taxes at typical rates.
- 9. In considering the tax thresholds for married couples with two dependent children, regard should also be had to social security benefits payable for children since in some countries child tax allowances (which are reflected in the table) are supplemented by child benefits (which are excluded); and in other countries, including the United Kingdom, there are child benefits but no child tax allowances. To complete the picture, the annual amount of child benefit for two children (at basic rates) in these countries was as follows in 1983 (1983–84 in Ireland and United Kingdom):
£ Belgium 815 Denmark 315 France 460 Germany 445 Greece 150 Ireland 210 Italy 200 Luxembourg 570 Netherlands 600 United Kingdom 633
Note: Child benefit for the second and later children is means tested in Germany.