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Income Tax

Volume 885: debated on Tuesday 28 January 1975

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asked the Chancellor of the Exchequer what gross income would require to be earned in (a) four years' time and (b) 10 years' time by a married man with two children in order to maintain in real terms the net value after tax of his present annual earnings before tax of (a) £2,000, (b) £3,000, (c) £4,000 and (d) £5,000 on the assumption that inflation runs at an annual rate of 20 per cent. and the present rates of tax continue.

The figures are as follows:

1974–75Gross earnings required in
Gross earningsEarnings after tax4 years' time10 years' time
££££
2,0001,7514,80625,598
3,0002,4217,03550,004
4,0003,0919,74474,404
5,0003,76113,31698,810
For the purposes of the calculations it has been assumed that the children are under 11 throughout; that the 1974–75 rates of personal allowances remain in force; that the arrangements for family allowances and clawback remain as in 1974–75; and that family allowance is not claimed where it is not to the taxpayer's advantage.