Earned Incomes (Taxation)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 7th March 1967.

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Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames 12:00 am, 7th March 1967

asked the Chancellor of the Exchequer what percentage of his earnings above £5,000, £8,500, £10,000, and £15,000 a year is retained after payment of income tax and surtax by a married man with two children and no unearned income; and what are the comparable figures for a similar man after payment of direct taxation in the United States, France, West Germany and Japan, based on information he derives from international organisations.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

It depends on how much extra earnings he has. I will, with permission, circulate a table in the OFFICIAL REPORT.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

Does the Financial Secretary accept that economic harm is done to the country's competitiveness if rates of personal taxation remain higher than those on comparable people in competing countries; and that, indeed, once we were in the Common Market these rates would be impossible to maintain?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

No, Sir. I think that the right hon. Gentleman's proposition is much too wide, and perhaps he had better wait until he sees the table.

Photo of Mr Arthur Newens Mr Arthur Newens , Epping

Is my hon. and learned Friend aware that many wage earners are receiving incomes not sufficient to keep their families at subsistence level? Is it not more important to turn attention to that type of person before turning to the more highly paid executives?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

We shall take all relevant matters into account, but I agree with my hon. Friend that our prime object is to get fairness in our tax system.

PERCENTAGE OF ADDITIONAL EARNINGS (UP TO £100) RETAINED AFTER PAYMENT OF INCOME TAX AND SURTAX, OR THEIR EQUIVALENTS
Level of earningsUnited Kingdom*United States FranceWest GermanyJapan§
£5,00063·362·178·461·742
£8,50043·347·371·254·736
£10,00026·2541·660·452·936
£15,00016·2537·653·249·830
Notes:
* Excluding the effect of the 10 per cent. surcharge, and assuming the children are both under 11.
An equivalent rate of $5 = £1 has been assumed to allow for the substantially higher cost-of-living in the United States. The figures shown relate to California. The tax deducted includes Californian income tax which is partly deductible for Federal income tax; it also includes the proposed 6 per cent. Vietnam surcharge on Federal income tax.
The scale rises continuously, and so the percentage remaining relates only to small increases in earnings above the levels given.
§ An equivalent rate of 1,010 Yen = £1 has been taken. The figure allows for Prefectural and Municipal Inhabitants Income Tax, not deductible for the National Income Tax.