§ Mr. MeacherTo ask the Chancellor of the Exchequer what was the average tax rate including local and central Government income tax and social security payments, as a percentage of the gross income of a married man with two children earning(a) £20,000 a year and (b) £40,000 a year in (i) the United Kingdom, (ii) France, (iii) Germany, (iv) the United States of America and (v) Japan in 1993; and what he estimates will be the percentage figures for the same persons in the United Kingdom in the fiscal year 1995–96 based on Government tax policies already announced.
§ Mr. Dorrell[holding answer 29 March 1994]: The table gives the information requested.
International comparisons of this nature can be misleading because the rules of the tax and social security systems, and the level of provision of public services, vary widely. For example, in Germany, people with the levels of income shown would be above the threshold where they cease to be liable to make contributions for sickness and they would have to make private provision. The comparison also takes no account of indirect taxes. The table includes employers' social security contributions. This gives a more complete picture, as both the employer's and employee's contributions are likely to affect take-home pay.
Figures for the United Kingdom for 1995–96 will depend on changes in earnings and prices and the value of allowances.
181W4Local taxes at the standard rate.
5Excluding those social security contributions for employees with earnings above the insurable ceilings.
6California local income tax rates.