§ Mr. Phillip Oppenheimasked the Chancellor of the Exchequer what was the percentage share of tax paid by the top 5, 10 and 20 per cent. of income earners for the years 1978–79 and 1985–86.
§ Mr. Norman Lamont[pursuant to his reply, 4 December 1986, c. 775]: The information is given in the table. The analysis is of single people and married couples and the quantiles are determined by reference to income tax liability. The figures for 1978–79 are based on the survey of personal incomes for that year. For 1985–86, they are based on a projection from the 1984–85 survey and are therefore provisional.
Quantile shares of income tax Quantile group of tax units1 1978–79 per cent. 1985–86 per cent. Top 5 per cent. 24.0 26.5 Top 10 per cent. 34.5 37.0 Top 20 per cent. 50.2 53.0 1 ie counting married couples as one and combining their incomes.
§ Dr. McDonaldasked the Chancellor of the Exchequer what would be the cost in the 1987–88 financial year of introducing a reduced rate tax band of (a) 25 per cent. and (b) 20 per cent. on the first £1,500 of taxable income; and what would be the effect on the net income of (i) a single person, (ii) a couple where the wife is not working, and (iii) a couple where the wife is working and paying tax.
§ Mr. Norman Lamont[pursuant to his reply, 4 December 1986, c. 775]: The direct revenue costs are estimated to be 427W about £1,300 million and £2,800 million, respectively, in a full year at 1987–88 levels of income, compared with the illustrative income tax regime resulting from indexation by 3.25 per cent. The estimates assume that a separate lower rate band would be available to a married couple against the wife's earned income and that the thresholds for higher rate tax would be unaffected by the introduction of the lower rate band. The effect on the incomes of taxpayers with taxable income of at least £1,500 per annum would be as follows:
Increase in income after tax (£ per week) Reduced rate of tax 25 per cent. 20 per cent. Single person 1.15 2.60 Married couple (wife not working) 1.15 2.60 Married couple (wife working1) 2.30 5.20 1 Assuming that both husband and wife each have taxable income of at least £1,500 per annum.