HC Deb 05 December 1974 vol 882 cc565-7W
Mr. Ridley

asked the Chancellor of the Exchequer if he will set out those countries which have ceilings to total personal tax liability; and indicate what those ceilings are.

Dr. Gilbert

The following is the information requested. Additional information about taxes on net wealth is contained in Appendix 3 of the Green Paper on Wealth Tax (Cmnd. 5704).

Belgium:

National income tax may not exceed 55 per cent., of taxable income plus a 10 per cent, surcharge.

Denmark:

The total of the national income tax, the local income taxes, and the national basic pensions contribution, may not exceed 70

zero rate of VAT to most ships and by the end-use tariff reliefs from import duties. The industry was also entitled to refunds of selective employment tax during this period and payments of selective employment premium when this applied.

Following are the figures

per cent, of taxable income. Where necessary the national income tax is reduced accordingly.

Netherlands:

The sum of the national income and the national wealth tax may not exceed 80 per cent, of taxable income.

Sweden:

The total of national and local income taxes and the national wealth tax, may not exceed 80 per cent, of the first 200,000 Kr—about £20,000—taxable income plus 85 per cent, of the remainder.

The national income tax is first reduced by the excess and then the national wealth tax, but the national wealth tax may not be reduced beyond the tax chargeable on 40 per cent, of taxable wealth.

Norway:

There is no ceiling in force at present. The 1975 Norwegian Budget includes a proposal for the restoration of a ceiling from the 1974 income year; this would be a ceiling—on national and local income and wealth taxes and certain social security contributions—of 90 per cent, of national taxable income. The excess would be relieved by reducing first the national income tax and then the national wealth tax, but the national wealth tax would not be reducible beyond the tax chargeable on 50 per cent, of the taxable wealth.

Finland:

The total of the national and local income tax, the national wealth tax, and social security contributions, may not exceed 90 per cent, of taxable income. Where necessary the national income tax is reduced accordingly.

Japan:

Where the total of the national income tax and the prefectural (provincial) and municipal income and poll taxes exceeds 80 per cent, of the national taxable income, the local income taxes (prefectural/municipal) are reduced by the excess.

Spain:

The national income tax—General Income Tax on the Income of individuals—may not exceed 40 per cent, of the taxable income

Pakistan Bangladesh:

Income tax may not exceed 70 per cent, of "total income".

USA:

There is a statutory maximum marginal rate of 50 per cent, for all earned income, so that effectively the federal income tax charge on earned income can never reach 50 per cent, of taxable earned income.