§ 23. Mr. DuncanTo ask the Chancellor of the Exchequer what evidence he has of the effect on incentives of cutting higher rates of direct taxation; and by how much higher rates of income tax have been changed since 1979.
§ Mr. DorrellIn 1979, the top rate of tax on earned income was 83 per cent. It is now 40 per cent. Cutting tax rates has improved incentives at all levels, and has encouraged entrepreneurial initiative upon which the nation depends. Higher-rate taxpayers now contribute 40 per cent. of total income tax compared with 20 per cent. in 1979.