§ Mr. Ralph Howellasked the Chancellor of the Exchequer what percentage of income tax was derived from unearned income in each of the years since 1969.
§ Dr. GilbertAs I explained in reply to an earlier Question by the hon. Member, it is not possible definitively to allocate tax between different sources of income, but on the arbitrary assumption that, in the case of mixed earned and investment incomes, investment income forms the top slice of income, the estimates are as follows:
Income tax on rent, dividends and interest as per cent, of total income tax 1969 20 1970 18½ 1971 19 1972 20 The figures relate to income tax receipts net of estimated repayments only and do not include surtax.
Figures for 1973 are not yet available
§ Dr. Phippsasked the Chancellor of the Exchequer what is the redistributive effect of income tax.
§ Mr. DellTable 1 of the Inland Revenue Survey of Personal Incomes for 1970–71 (HMSO 1973), which is the latest information available, shows the distribution of personal income before and after tax. The last Budget made the system more progressive. As a result of increased allowances 1½ million relatively low-income taxpayers were relieved from income tax a new higher rate band was created and income tax rates were increased. Details of the changes, including their effects at different income levels, are shown in the Financial Statement and Budget Report.