HC Deb 09 December 1976 vol 922 cc357-8W
Mr. Newton

asked the Chancellor of the Exchequer what is the approximate addition to revenue that would arise from raising the rate of income tax to 100 per cent. on all incomes over £10,000 per annum and relating this figure to the existing revenue from taxation.

Mr. Robert Sheldon

It is estimated that the additional yield for 1976–77 would be about £700 million or about 4 per cent. of the forecast yield of income tax. In making this estimate it has been assumed that for mixed incomes exceeding £10,000 the 100 per cent. rate would be applied first to any investment income and then, as to any remainder of the excess, to earned income. Tax on the

Mr. Denzil Davies

I understand that the top rates of tax on capital transfers are as follows:

income below the limit would then be charged at 1976–77 rates and allowances after allowing deductions such as mortgage interest. The result is, however, entirely hypothetical in that it rests on the unrealistic assumption that there would be no change in the distribution of pre-tax income resulting from the imposition of 100 per cent. tax over a given level.

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