Income Tax Thresholds (Hansard, 24 January 1977)

§ Mr. Rippon
asked the Chancellor of the Exchequer what would be the cost to the Exchequer in the current financial year if the income tax threshold were raised either by (a) £500 or (b) £250.

§ Mr. Robert Sheldon
I shall let the hon. Member have a reply as soon as possible.

§ Mr. John Moore
asked the Chancellor of the Exchequer, for a married man with three children, taking no other exemptions, what is the current tax threshold, starting rate, and maximum rate of tax 415W on earned income in the United Kingdom, USA and West Germany on 1st January 1977; and at what level the maximum rate is applied.

MARRIED MAN WITH 3 CHILDREN (AGED UNDER 11)

Income Tax Threshold £ Initial Rate per cent. Maximum Rate per cent. Level at which Maximum Rate payable £

United Kingdom … … … 1,985 35 83 21,985

Germany … … … 2,200 22 56 64,350

USA … … … 4,450 25 50 (55.5) 29,900

NOTES:—

1. United Kingdom figures are for the tax year 1976–77. Figures for Germany and USA are for 1976 income: rates applicable to the 1977 income year are not yet available.

2. Foreign currency amounts are converted into sterling at 18th January 1977 exchange rates and rounded to the nearest £50.

3. All figures are for employment income of the husband only; where flat-rate or minimum reliefs or expense allowances are given against employment income, including deductible social security contributions in Germany and deductible local income tax in the USA; these have been taken into account.

4. United Kingdom. No account has been taken of family allowances or the family allowance deduction ("clawback").

5. USA. The initial rate given (25 per cent.) is an effective rate which combines the effects of 15 per cent. tax and the withdrawal of earned income tax credit at the rate of $1 for every $10 increase in income. The figure in brackets includes California state income tax. No State income tax is payable at the threshold for federal income tax.

MARRIED MAN WITH 3 CHILDREN (AGED UNDER 11)
				Income Tax Threshold £	Initial Rate per cent.	Maximum Rate per cent.	Level at which Maximum Rate payable £
United Kingdom	…	…	…	1,985	35	83	21,985
Germany	…	…	…	2,200	22	56	64,350
USA	…	…	…	4,450	25	50 (55.5)	29,900
NOTES:—
1. United Kingdom figures are for the tax year 1976–77. Figures for Germany and USA are for 1976 income: rates applicable to the 1977 income year are not yet available.
2. Foreign currency amounts are converted into sterling at 18th January 1977 exchange rates and rounded to the nearest £50.
3. All figures are for employment income of the husband only; where flat-rate or minimum reliefs or expense allowances are given against employment income, including deductible social security contributions in Germany and deductible local income tax in the USA; these have been taken into account.
4. United Kingdom. No account has been taken of family allowances or the family allowance deduction ("clawback").
5. USA. The initial rate given (25 per cent.) is an effective rate which combines the effects of 15 per cent. tax and the withdrawal of earned income tax credit at the rate of $1 for every $10 increase in income. The figure in brackets includes California state income tax. No State income tax is payable at the threshold for federal income tax.