Income Tax (Hansard, 28 January 1969)

§ Mr. Barnett
asked the Chancellor of the Exchequer what estimate he has made of the reduction of revenue in 1969–70 arising from a cut in the standard rate of tax on earned income only by 6d.; and what estimate he has made of the reduction in revenue arising from a cut in the reduced rates on earned income by 6d.

§ Mr. Harold Lever
On the assumption that earned income was treated as the bottom slice of a mixed income, about £110 million and £140 million respectively for 1968–69, the latest year for which estimates are available.

§ Mr. Boyd-Carpenter
asked the Chancellor of the Exchequer what percentage of the next £1,000 of his earnings above £5,000, £8,500, £10,000 and £15,000 a year is now retained by a married man with two children under 11 years of age; 285W and what are the comparable figures at current rates of exchange by a similar man after payment of direct taxation in the United States, France, West Germany

TABLE

PERCENTAGE OF ADDITIONAL EARNINGS (OF AN EXTRA £1,000) RETAINED AFTER PAYMENT OF INCOME TAX AND SURTAX OR THEIR EQUIVALENTS BY A MARRIED MAN WITH TWO CHILDREN UNDER 11 YEARS OF AGE

Level of earnings U.K. United States France W. Germany Japan

(1) (2) (3) (4)

£5,000 … … 57.4 72.3 73.2 61.8 44.6

£8,500 … … 39.9 63.2 66.9 54.6 36.0

£10,000 … … 26.3 57.9 66.9 52.6 36.0

£15,000 … … 15.5 45.6 58.6 48.6 31.0

(1) The calculations assume that all income at each level is earned.

(2) The figures are for California. The tax deducted includes Californian income tax which is partly deductible for Federal income tax. The calculation is for 1968 and includes a 10 per cent Vietnam surcharge.

(3) Standard expenses deductions have been taken into account in the calculation.

(4) National, prefectural and municipal income taxes are included in the deductions. The figures are for the 1968–69 tax year.

(5) The earnings levels have been converted at the official rates of exchange.

TABLE
PERCENTAGE OF ADDITIONAL EARNINGS (OF AN EXTRA £1,000) RETAINED AFTER PAYMENT OF INCOME TAX AND SURTAX OR THEIR EQUIVALENTS BY A MARRIED MAN WITH TWO CHILDREN UNDER 11 YEARS OF AGE
Level of earnings			U.K.	United States	France	W. Germany	Japan
			(1)	(2)		(3)	(4)
£5,000	…	…	57.4	72.3	73.2	61.8	44.6
£8,500	…	…	39.9	63.2	66.9	54.6	36.0
£10,000	…	…	26.3	57.9	66.9	52.6	36.0
£15,000	…	…	15.5	45.6	58.6	48.6	31.0
(1) The calculations assume that all income at each level is earned.
(2) The figures are for California. The tax deducted includes Californian income tax which is partly deductible for Federal income tax. The calculation is for 1968 and includes a 10 per cent Vietnam surcharge.
(3) Standard expenses deductions have been taken into account in the calculation.
(4) National, prefectural and municipal income taxes are included in the deductions. The figures are for the 1968–69 tax year.
(5) The earnings levels have been converted at the official rates of exchange.