Income Tax (Hansard, 19 November 1976)

§ Mr. John Moore
asked the Chancellor of the Exchequer what would be the loss in revenue in 1976–77 if the maximum rate of tax on earned income were 50 per cent.

§ Mr. Robert Sheldon
If earned income is treated as the lower slice of any mixed income the estimated loss of revenue for 1976–77 would be about £235 million.

§ Mr. John Moore
asked the Chancellor of the Exchequer what would be the loss in revenue to the Exchequer in 1976–77 if the maximum rate of tax on earned income were reduced to 50 per cent. and the other present rates were reduced also as indicated: present 35 per cent. to 20 per cent., present 40 per cent. to 25 per cent., present 45 per cent. to 30 per cent., and present 50 per cent. to 35 per cent., and all rates currently above 50 per cent. to 50 per cent. as a maximum;
(2) what would be the loss in revenue to the Exchequer in 1976–77 if the maximum rate of tax on earned income were reduced to 50 per cent. and the rates were reduced also as indicated: 35 per cent. to 15 per cent., 40 per cent. to 20 per cent., 45 per cent. to 25 per cent., and 50 per cent. to 30 per cent., and all rates currently in excess of 50 per cent. to 50 per cent. as a maximum.
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(3) what would be the loss in revenue to the Exchequer in 1976–77 if the maximum rate of tax on earned income were reduced to 50 per cent. and the other present rates were reduced as indicated: present 35 per cent. to 25 per cent., present 40 per cent. to 30 per cent., present 45 per cent. to 35 per cent. and present 50 per cent. to 40 per cent. and all rates currently above 50 per cent. to 50 per cent. as a maximum.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 12th November 1976; Vol. 919, c. 291], gave the following information:
If earned income is treated as the lower slice of any mixed income the estimated costs for 1976–77 would be about £6,900 million, £9,150 million and £4,700 million respectively.

§ Mr. Sedgemore
asked the Chancellor of the Exchequer how many people are paying income tax at a rate of 50 per cent. and above; and how many are paying income tax at a rate of less than 50 per cent.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 18th November 1976], gave the following information:
The estimated number of taxpayers paying income tax for 1976–77 at a marginal rate of 50 per cent. or above—excluding the investment income surcharge—is about 700,000. The corresponding number paying at less than 50 per cent, is 20.3 million. Married couples are counted as one tax unit.