§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer (1) what proportion of total tax, direct and indirect, where figures are available(a) was paid in 1986–87 and (b) would be paid in 1989–90 assuming tax allowances are increased by (i) the increase in earnings, (ii) twice the increase needed for indexation and treating child benefit as negative income tax for the following groups (A) a single person on (i) 50 per cent., (ii) 75 per cent., (iii) 100 per cent., (iv) 200 per cent., (v) 300 per cent., (vi) 400 per cent. and (vii) 500 per cent. of average earnings, (B) a one-earner couple with no children, (C) a one-earner couple with two children and (D) a two-earner couple with two children for the same multiples of average earnings;
(2) if he will publish in the Official Report a table along the same lines as in the answer provided to the hon. Member for Hornchurch (Mr. Squire) in the Official Report, 10 January, columns 633–56, with figures for 1989–90, given the changes to national insurance contributions and benefits already announced and assuming that all the basic allowances are increased (a) the increase in earnings and (b) twice the amount needed for indexation.
§ Mr. Norman Lamont[holding answer 28 February 1989]: The table gives payments of income tax and national insurance contributions as a proportion of earnings for the income levels and tax allowances specified. They assume no change in tax rates in 1989–90. Payments of indirect taxation would depend on the expenditure patterns of the taxpayer and on indirect tax rates for 1989–90. As the latter have not been specified, no estimates for indirect tax payments are provided. No estimates are given for tax paid by a two-earner couple with two children as this would depend on the distribution of income between the couple.
565W
per cent. Multiple of average male earnings 50 75 100 200 300 400 500 1986–87 Single person Income Tax 16.8 20.9 22.9 27.3 34.0 39.1 43.3 NIC 9.0 9.0 9.0 6.0 4.0 3.0 2.4 Total Tax 25.8 29.9 31.9 33.3 38.0 42.1 45.7 One-earner couple with no children Income Tax 9.9 16.3 19.5 24.9 32.0 37.4 41.8 NIC 9.0 9.0 9.0 6.0 4.0 3.0 2.4 Total Tax 18.9 25.3 28.5 30.9 36.0 40.4 44.2 One-earner couple with two children Income Tax -3.3 7.5 12.9 21.6 29.8 35.7 40.5 NIC 9.0 9.0 9.0 6.0 4.0 3.0 2.4 Total Tax 5.7 16.5 21.9 27.6 33.8 38.7 42.9 (i) 1989–90 if tax allowances increased by the rise in average earnings Single person Income Tax 15.1 18.4 20.1 25.1 30.0 32.5 34.0 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 24.1 27.4 29.1 30.4 33.6 35.2 36.2 One-earner couple with no children Income Tax 9.5 14.7 17.2 22.8 28.5 31.4 33.1 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 18.5 23.7 26.2 28.2 32.1 34.1 35.3 One-earner couple with two children Income Tax -1.1 7.6 11.9 20.1 26.7 30.1 32.0 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 7.9 16.6 20.9 25.5 30.3 32.8 34.2 (ii) 1989–90 if tax allowances increased by twice the increase required for statutory indexation Single person Income Tax 14.6 18.0 19.8 24.2 29.5 32.1 33.7 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 23.6 27.0 28.8 29.6 33.0 34.8 35.8 One-earner couple with no children Income Tax 8.6 14.1 16.8 21.8 27.9 30.9 32.7 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 17.6 23.1 25.8 27.2 31.5 33.6 34.9 One-earner couple with two children Income Tax -2.0 7.0 11.5 19.1 26.1 29.6 31.6 NIC 9.0 9.0 9.0 5.4 3.6 2.7 2.1 Total Tax 7.0 16.0 20.5 24.5 29.7 32.3 33.8 Notes:
1. The figures assume average earnings in 1989–90 are 7.5 per cent. higher than in 1988–89 (in line with the GAD assumption given in the Autumn Statement).
2. Figures for a married couple with two children deduct child benefit from income tax.
3. Income tax payments are calculated on the assumption that the tax payers have no other tax reliefs apart from the standard allowances. Earners are assumed to pay class 1 national insurance contributions at the contracted-in rate.