§ Mr. Meacherasked the Chancellor of the Exchequer by how much the cost of the tax credit system, as outlined in the Green Paper, would be reduced by introducing the higher income tax rates at incomes above £3,000 per year as follows: on £3,000-£4,000 at 35 per cent., on £4,000-£5,000 at 40 per cent., on £5,000-£6,000 at 50 per cent., on £6,000£8,000 at 60 per cent., on £8,000-£10,000 at 63 per cent., on £10,000-£15,000 at 67.5 per cent., and on £15,000 and above at 75 per cent.
§ Mr. NottOn the basis of 1972–73 incomes, an increase in the higher rates of tax as proposed would yield about £300 million.
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§ Mr. Meacherasked the Chancellor of the Exchequer whether the estimated £1,300 million cost of the tax credits proposals takes into account the savings arising from the replacement of means-tested benefits by credits for many low income families; and what is estimated to be the annual saving regarding means-tested benefits paid, respectively, to families with dependent children and to retirement pensioners.
§ Mr. NottThe estimated cost of £1,300 million allows for a saving of about £250 million in FIS and supplementary benefits of which about £20 million will come from families with dependent children and about £200 million from retirement pensioners.
§ Mr. Meacherasked the Chancellor of the Exchequer how much of the £150 million per year estimated to accrue as a net gain to households with income under £20 a week under the tax credits proposals will be received by, respectively, retirement pensioners and non-pensioner households with respectively, no dependent children, one child, two children, three children, four children and five or more children.
§ Mr. NottThe estimates are:
£ million Retirement pensioners … … 80 Others— No children … … 20 1 child … … 22 2 children … … 15 3 children … … 12 4 or more children … … 1 Total … … 150