§ Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer further to his reply to the hon. Member for Blackburn (Mr. Straw) Official Report, 2 July, columns 112–15, if he will now publish similar figures relating to income tax and national insurance contributions; and if he will show total taxes as a percentage of gross earnings in each case.
§ Mr. MooreThe information is in the table.
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Single Married (one working) Married (both working) Married with two children (one working) NIC 7.11 7.11 7.11 7.11 Total taxes and NIC as a percentage of gross earnings 41.1 39.4 34.2 31.1 1980–81 Income tax 31.52 27.08 19.14 27.08 NIC 8.88 8.88 8.88 8.88 Total taxes and NIC as a percentage of gross earnings 42.1 40.3 35.6 32.8 1981–82 Income tax 35.87 31.43 23.49 31.43 NIC 11.32 11.32 11.32 11.32 Total taxes and XIC as a percentage of gross earnings 43.9 42.6 38.5 34.8 1982–83 Income tax 38.22 33.14 24.12 33.14 NIC 13.78 13.78 13.78 13.78 Total taxes and NIC as a percentage of gross earnings 44.4 42.8 38.6 35.0 1983–84 Income tax 41.0 35.18 24.88 35.18 NIC 15.39 15.39 15.39 15.39 Total taxes and NIC as a percentage of gross earnings 44.5 42.8 38.4 34.7 1984–85 Income tax 43.99 37.36 25.79 37.36 NIC 16.67 16.67 16.67 16.67 Total taxes and NIC as a percentage of gross earnings 44.2 42.3 37.8 34.3 1985–86 Income tax 46.74 39.53 26.81 39.53 NIC 17.84 17.84 17.05 17.84 Total taxes and NIC as a percentage of gross earnings 44.0 42.0 37.0 34.2 150 per cent, of average earnings 1978–79 Income tax 38.58 35.09 27.69 33.82 NIC 7.80 7.80 9.06 7.80 Total taxes and NIC as a percentage of gross earnings 42.9 42.0 37.8 35.8 1979–80 Income tax 41.79 38.04 30.60 38.04 NIC 8.78 8.78 10.67 8.78 Total taxes and NIC as a percentage of gross earnings 42.0 41.3 37.9 34.7 1980–81 Income tax 51.24 46.80 38.87 46.80 NIC 11.14 11.14 13.31 11.14 Total taxes and NIC as a percentage of gross earnings 42.7 42.0 39.0 36.0 1981–82 Income tax 57.77 53.33 45.39 53.33 NIC 15.50 15.50 16.97 15.50 Total taxes and NIC as a percentage of gross earnings 44.7 44.3 41.3 38.1 1982–83 Income tax 61.85 56.77 47.74 56.77 NIC 19.25 19.25 20.67 19.25 Total taxes and NIC as a percentage of gross earnings 45.4 44.8 41.6 38.6 1983–84 Income tax 66.65 60.83 50.53 60.83 NIC 21.15 21.15 23.09 21.15 Total taxes and NIC as a percentage of gross earnings 45.4 44.7 41.6 38.5 1984–85 Income tax 71.77 65.14 53.57 65.14 NIC 22.50 22.50 25.00 22.50 Total taxes and NIC as a percentage of gross earnings 45.1 44.3 41.3 38.2 1985–86 Income tax 76.47 69.26 56.54 69.26 NIC 23.85 23.85 26.76 23.85 Total taxes and NIC as a percentage of gross earnings 44.9 44.0 41.1 38.0 Note: total taxes and NIC are taken to taken to include income tax less child benefit, NIC, and central government indirect taxes.
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§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing for the United States of America and the United Kingdom the change in the incidence of (a) direct and (b) indirect taxation since 1979 for a person on average earnings so far as this can be calculated.
§ Mr. Moore[pursuant to his reply, 18 July 1985, c. 257]: The figures in the following table give a comparison of (a) income tax and social security contributions; (b) indirect tax payments as a percentage of gross earnings of an average production worker (APW) using the OECD's definition. The tax figures are calculated for a married man with a non-earning wife and two children who earns the APW average. Indirect tax payments (excluding LA rates) are given only for the United Kingdom APW. These are based on a typical expenditure pattern for this earnings level, derived from the family expenditure survey. Equivalent information for the United States is not readily available.
(Per cent, of gross earnings) United States (California) United Kingdom 1979 (United Kingdom 1979–80) (a) Income tax and employees' social security contributions 15 26 (b) Indirect taxes n/a 13 1985 (United Kingdom 1985–86) (a) Income tax and employees' social security contributions 17 26 (b) Indirect taxes n/a 13 Notes:
1. As comparable figures for all occupations, average earnings are not available, the comparison has been made instead on the basis of the earnings of an APW as published by OECD. The 1979 earnings figures refer to males only whereas the 1985 figures refer to men and women because of a change in the OECD series. The 1985 figures are derived by updating the published OECD figures for 1983.
2. Personal reliefs, employment income reliefs and other standard reliefs have been taken into account.
3. It is assumed that the United Kingdom employee is not contracted out from the State pension scheme.
4. The figures for the United States of America include local income taxes at 1984 rates. The 1985 rate is not fixed until the autumn.
5. If child benefits were deducted from the United Kingdom's income tax and social security contributions, the percentages would be:
1979–80 17
1985–86 17
There are no child benefits or analogous payments in the United States of America.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing for the years 1973–74, 1978–79 and the current financial year, at a full year rate, the percentage of gross income taken in (a) direct taxes, including national insurance contributions less child benefit and (b) indirect taxation, in the case of a married man with two children, one earner and no other allowances where the earnings of the married man are (i) 45 per cent., (ii) 60 per cent., (iii) 100 per cent., (iv) 200 per cent. and (v) 300 per cent. of average earnings; and if he will provide comparable figures for single persons.
§ Mr. Moore[pursuant to his reply, 18 July 1985, c. 257]: The available information is in the table. Indirect tax payments cannot reliably be estimated below about 75 per cent. or above about 150 per cent. of average earnings. Estimates of indirect tax payments in 1973–74 are not readily available.
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Per cent, of gross earnings 1973–74 1978–79 1985–86 Single 45 per cent, of average earnings (a) Direct taxes 19.4 21.8 23.7 60 per cent, of average earnings (a) Direct taxes 23.4 26.2 28.3 100 per cent, of average earnings (a) Direct taxes 27.9 31.5 32.6 (b) Indirect taxes n/a 10.2 11.5 200 per cent, of average earnings (a) Direct taxes 29.4 33.7 33.9 300 per cent, of average earnings (a) Direct taxes 31.5 39.8 38.2 Married with two children 45 per cent, of average earnings (a) Direct taxes 2.4 —0.7 0.2 60 per cent, of average earnings (a) Direct taxes 9.4 8.4 10.6 100 per cent, of average earnings (a) Direct taxes 19.6 20.9 22.0 (b) Indirect taxes n/a 11.0 12.2 200 per cent, of average earnings (a) Direct taxes 25.2 27.9 28.0 300 per cent, of average earnings (a) Direct taxes 27.9 34.8 33.8 Notes:
1. Average earnings are taken to be the average gross weekly earnings of all full time males on adult rates with pay unaffected by absence. The figure for 1985–86 is illustrative and assumes growth of 7 per cent. over the provisional 1984–85 outturn.
2. Direct taxes include income tax and national insurance contributions, less child benefit or family allowance; indirect taxes exclude rates but include the indirect effects of taxes levied on businesses.
3. The estimates of indirect tax payments are derived from the 1983 Family Expenditure Survey.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing the estimated taxable values in the current financial year of benefits to taxation under special taxation rules under the different headings together with the real values in each case.
§ Mr. Moore[pursuant to his reply, 18 July 1985, c. 258]: Provisional estimates, for 1985–86, of the taxable values of benefits subject to taxation under special rules are as follows:
£ million Company cars and car fuel available for private use 1,050 Accommodation 15 Vouchers, including luncheon vouchers 30 Cheap or interest-free loans 40 Private medical insurance 50 The taxable values of vouchers and private medical insurance are based on the cost to the employer of providing the benefits.
The remaining benefits are charged to tax on a conventional basis and I regret that information is not available on which to base a reliable estimate of their value on another basis.