§ Mr. Ralph Howellasked the Chancellor of the Exchequer if he will publish a table showing the starting rate and the top rate of income tax, in league order with the highest at the top, of each of the following countries: United Kingdom, Germany, United States of America, France, Japan and Sweden.
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§ Mr. Robert SheldonThe following is the information requested for the income year 1976 (United Kingdom 1976–77 fiscal year):
A. STARTING RATES OF INCOME TAX Employment Income Per cent. United Kingdom … … … 35 Germany … … … 22 USA … … … 14(15) Japan … … … 10(14) Sweden … … … 4(29.2) France … … … 3.6
Investment Income Per cent. United Kingdom … … … 35 Germany … … … 22 USA … … … 14(15) Japan … … … 10(14) France … … … 5 Sweden … … … 4(29.2) The rates shown are the lowest that can apply irrespective of family circumstances.
The figures in brackets include: (a) for USA, the starting rate of California income tax; (b) for Japan, the starting rates of provincial and municipal income taxes; (c) for Sweden, the average rate of local income tax.
USA—The starting rates given for employment income are the lowest possible. Some taxpayers are subject to a progressive withdrawal of tax credit at their tax threshold which can increase the effective marginal rate of tax at that point to as much as 25 per cent.
Japan—Depending on their circumstances, some taxpayers receive a percentage relief against their employment income which has the effect of reducing the marginal rate of tax at their tax threshold. For example, a married man with two children receives a 30 per cent. relief which reduces his effective starting rate to 7 per cent. (9.8 per cent. including provincial and municipal taxes).
France—The starting rate of income tax on employment income takes into account the 10 per cent. minimum expenses deduction, and the 20 per cent. employment income relief applicable at this level.
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B. TOP RATES OF INCOME TAX Employment Income % United Kingdom … 83 Japan … 67.5 (83.7) Sweden … 57 (82.2) Germany … 56 France … 54 USA … 50 (55.5)
Investment Income % United Kingdom … 98 Japan … 75 (93) USA … 70 (73.3) France … 60 Sweden … 57 (82.2) Germany … 56 NOTES:
The figures in brackets include: (a) for USA, the top rate of California income tax after taking into account its deductibility for federal income tax at this level; (b) for Japan, the top rates of provincial and municipal income taxes; (c) for Sweden, the average rate of local income tax.
Percentage of value in 1946–47 1956–57 1966–67 1976–77 Single person's allowance … 149 219 570 Married person's allowance … 154 209 519 Child tax allowance: Child not over 11 … 226 260 526 (435) Child over 11 but not over 16 … 226 316 588 (496) Child over 16 … 226 372 640 (549) Retail Price Index … 156 206 531 The Retail Price Index is taken from Table 2 of "The Internal Purchasing Power of the Pound", published by the Central Statistical Office and relates to the nearest calendar year except for 1976–77 where the index is the average for the first 11 months of 1976.
The figures in brackets are net of the family allowance deduction ("clawback"). The figures take account where appropriate of the effect of earned income relief and the relief given for national insurance contributions.
§ Mr. Ovendenasked the Chancellor of the Exchequer what were the levels of
1966–67 1971–72 1976–77 1961–62 Value of allowances Value of allowances Value at 1961–62 prices Value of allowances Value at 1961–62 prices Value of allowances Value at 1961–62 prices £ £ £ £ £ £ £ Single person 203 283 237 418 264 735 238 Married couple 332 437 367 598 377 1,085 351 Married couple with 2 children aged between 11 and 16. 653 797 669 1,061 (1,007) 669 (635) 1,755 (1,703) 568 (552) Married couple with 4 children (2 not over 11 and 2 between 11 and 16). 910 1,093 917 1,459 (1,297) 920 (818) 2,355 (2,199) 763 (712) The figures take account where appropriate of the effect of earned income relief and of the relief given for national insurance contributions in 1961–62. For 1971–72 and 1976–77 the figures in brackets show the value of
588WThe top rate of income tax on employment income in France takes into account the 10 per cent. minimum expenses deduction.
The top rate of income tax on employment income in Japan takes into account the 10 per cent. employment income relief applicable at this level.