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Income Tax

Volume 888: debated on Wednesday 12 March 1975

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asked the Chancellor of the Exchequer if he will publish a table showing, for each member State of the EEC, (a) the maximum rate of personal direct taxation on earned income, (b) the level of earnings at which this rate comes into force for a single person and for a married couple with two children under 11 years of age, and (c) the proportion of total revenue accounted for by personal direct taxation.

The following is the information requested :A. The maximum marginal rates of national tax on income from employment are as follows:

Belgium72 per cent, (a)
Denmark39·6 per cent.
France48·6 per cent.
Germany56 per cent.
Ireland80 per cent, (b)
Italy82 per cent.
Luxembourg57 per cent.
Netherlands71 per cent.
United Kingdom83 per cent.
(

a) 60 per cent. plus two 10 per cent. surcharges. The maximum effective (average) rate is 50 per cent. excluding the two surcharges.

( b) A reduction to 70 per cent. is proposed in the 1975 Finance Bill in view of the introduction of a wealth tax.

Notes:

1. Local income taxes and social security contributions are not included in the rates shown.

2. In some of the countries concerned, the rates applying to earned income from self-employment differ from those shown above.

B. The levels of earnings at which the above rates come into force are as follows:

Single Person

Married Man with 2 children under 11

££
Belgium49,20049,000
Denmark7,0207,020
France14,20041,400
Germany23,70047,100
Ireland8,850 (b)9,550 (c)
Italy327,900327,900
Luxembourg8,70017,130
Netherlands25,80026,530
United Kingdom20,62621,346(a)

( a) Assumes that the family allowance is relinquished.

( b) This will be raised to £10,925 under the 1975 Finance Bill proposals.

( c) This will be raised to £11,730 under the 1975 Finance Bill proposals.

C. The latest available figures for the proportion of total revenue accounted for by personal direct taxation relate to 1972 and are as follows:

Belgium27·4 per cent.
Denmark48·0 per cent.
France11·1 per cent.
Germany28·1 per cent.
Ireland22·8 per cent.
Italy12·7 per cent.
Luxembourg26·6 per cent.
Netherlands27·9 per cent.
United Kingdom32·1 per cent.

Source: Revenue Statistics of OECD Member Countries 1965–72, Table 13.

Note: In this table, personal direct taxation includes both national and local taxes on earned and investment income and on capital gains; it is shown as a percentage of total central and local government revenue from taxation and social security contributions.