§ Lord Graham of Edmontonasked Her Majesty's Government:
Whether they will publish in the Official Report, a table showing for the United States of America and the United Kingdom the change in the incidence of (a) direct and (b) indirect taxation since 1976 for a person on average earnings so far as this can be calculated.
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§ The Secretary of State for Employment (Lord Young of Graffham)The figures in the table below give a comparison of (a) income tax and social security contributions; (b) indirect tax payments as a percentage of gross earnings of an average production worker (APW) using the OECD's definition. The tax figures are calculated for a married man with a non-earning wife and two children who earns the APW average. Indirect tax payments (excluding LA rates) are given only for the United Kingdom APW. These are based on a typical expenditure pattern for this earnings level, derived from the Family Expenditure Survey. Equivalent information for the United States is not readily available.
Following is the table referred to:
(%) of gross earnings) United States (California) United Kingdom 1976 (United Kingdom 1976/77) (a) Income tax and employees' social security contributions 17 23 (b) Indirect taxes N/A 11 1985 (United Kingdom 1985/86) (a) Income tax and employees' social security contributions 17 17 (b) Indirect taxes N/A 13 Notes
1. As comparable figures for all occupations, average earnings are not available, the comparison has been made instead on the basis of the earnings of an APW as published by OECD. The 1976 earnings figures refer to males only whereas the 1985 figures refer to men and women because of a change in the OECD series. The 1985 figures are derived by updating the published OECD figures for 1983.
2. Personal reliefs, employment income reliefs and other standard reliefs have been taken into account.
3. It is assumed that the United Kingdom employee is not contracted out from the state pension scheme.
4. The figures for the USA include local income taxes at 1984 rates. The 1985 rate is not yet known.
5. Child benefits have been deducted from the United Kingdom's income tax and social security contributions for 1985–86. There are no child benefits or analogous payments in the USA.