HC Deb 18 May 2000 vol 350 c264W
Mr. Willetts

To ask the Chancellor of the Exchequer, pursuant to his answer of 5 April 2000,Official Report, column 500W, on tax rates, if he will provide illustrative examples of cases where taxes and benefits can interact to produce a marginal deduction rate of (a) 40 per cent. and above, (b) 50 per cent. and above, (c) 60 per cent. and above, (d) 70 per cent. and above, (e) 80 per cent. and above and (f) 90 per cent. and above. [120381]

Dawn Primarolo

A marginal deduction rate (MDR) measures how much of an additional pound of earnings is paid in taxes or in reduced benefit or tax credit entitlement. The table gives some examples of the combinations of income tax and National Insurance for those on income-related benefits or WFTC that give rise to marginal deduction rates of 40 per cent. or more. All the examples assume that National Insurance is payable, at the contracted-in rate.

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