§ Mr. DobsonTo ask Mr. Chancellor of the Exchequer how much total tax revenue would be generated if the 1978–79 income tax regime were in place today assuming no behavioural change; and what would be(a) the total difference over the period and (b) the average yearly difference for taxpayers, broken down into the top 1 per cent. of tax payers and thereafter each 10 per cent. band of tax payers. [1483]
§ Mr. Jack[holding answer 21 November 1995]: Information on the reduction in income tax liability for 1995–96 compared with the 1978–79 indexed regime is given in the table. This comparison is hypothetical since if an indexed version of the 1978–79 tax regime had prevailed over the last 17 years, the income base would not have grown as it has. The effect of changes in mortgage interest relief cannot be included in the analysis because most mortgage interest relief is given at source and therefore is not recorded on individual tax records.
Table A Quantile group of taxpayers under the the 1978–79 indexed regime Per cent Reduction in tax £million Average reduction £ Top 1 9,900 36,900 2–10 6,800 2,800 11–20 4,100 1,500 21–30 3,200 1,200 31–40 2,600 960 41–50 2,100 770 51–60 1,600 610 61–70 1,300 470 71–80 890 330 81–90 530 200 Bottom 10 300 110 All taxpayers 33,300 1,240 In contrast to these hypothetical figures, table B shows how the share of income tax actually paid by high income groups has risen since 1979, while the share of the income tax burden borne by low income tax payers has fallen.
Table B: Calculations using the income base for each year Per cent. Quantile group of taxpayers Share of income tax in: 1978–79 1995–96 Top 1 11 16 Top 5 24 33 Top 10 35 44 Bottom 50 18 13 All taxpayers 100 100