HC Deb 10 March 1977 vol 927 c641W
Mr. Newton

asked the Chancellor of the Exchequer whether he will publish a table showing the marginal rates of income tax plus social security contributions for a married man with two children under 11 years on (a) average United Kingdom earnings, and equivalent sums, (b) twice average United Kingdom earnings and (c) three times average earnings

Income year 1x 2x 3x
United Kingdom … 1976–77 … … 40.75 50.0 65.0
Belgium … 1976 … … 28.2 35.6 41.8
(29.3) (37.8) (44.1)
Denmark … 1977 … … 18.6 33.0 43.8
(42.8) (57.2) (68.0)
France … 1976 … … 14.5 16.1 23.2
Germany … 1977 … … 34.1 30.2 36.0
Ireland … 1976–77 … … 38.5 60.5 77.0
Italy … 1977 … … 22.3 34.3 37.1
Luxembourg … 1977 … … 10.0 29.1 47.2
Netherlands … 1977 … … 42.9 44.1 50.0
United States of America … 1977 … … 30.85 24.35 25.0
(32.85) (28.35) (31.0)
Japan … 1976 … … 9.8 13.9 19.3
(13.2) (22.4) (28.6)
Notes:
1. As in my hon. Friend's answer to the hon. Member's recent Question about marginal rates of income tax—[Vol. 927, c. 92]—United Kingdom average earnings are taken as £4,077—the New Earnings Survey estimate of average earnings for full-time adult males in April 1976, updated to December 1976 by the Index of Average Earnings. Foreign currency equivalents have again been converted at the exchange rates for 16th February 1977.
2. Account has been taken, where appropriate, of any minimum, flat-rate, or percentage income tax reliefs and allowances. Combined rates reflect the deductibility, or partial deductibility, for income tax purposes of social security contributions in Belgium, France, Germany, Italy, Luxembourg, Netherlands and Japan.
3. The figures in brackets include:
(a)for Belgium, the normal rate of local income tax.
(b) for Denmark, communal income tax for Copenhagen.
(c) for United States of America, Californian income tax.
(d) for Japan, the normal rates of local income taxes.
4. The marginal rate payable in the United States of America on earnings equivalent to United Kingdom average earnings is higher than that payable on twice United Kingdom average earnings because at the lower income level taxpayers are subject to a progressive withdrawal of tax credit and at the higher income level they enjoy a percentage deduction from income instead of a flat rate deduction.
5. In the 2x column the decrease in the combined rate for Germany and the very slight increase in the combined rate for Netherlands are due to the fact that the ceiling for some social security contributions has been reached by that income level.