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Income Tax

Volume 975: debated on Tuesday 11 December 1979

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asked the Chancellor of the Exchequer how much extra income tax per week would be paid by a married man with two children earning the average weekly wage if the basic rate of income tax were to be increased by eight pence, leaving other rates, allowances and thresholds constant; and how much revenue would be raised by this change.

[Pursuant to his reply, 7 December 1979, c. 400]: If the basic rate of income tax were raised to 38 per cent., a married man on average manual earning in August 1979 would pay an extra £4 per week in income tax.This figure assumes that the first £750 of taxable income continues to be charged at the lower rate of 25 per cent.The assumed level of average earnings from August 1979 used in this calculation has been obtained by up-dating the new earnings survey estimate of average earnings of full-time adult male manual workers in April 1979, taking account of movements in a centred three-month moving average of the whole economy index of average earnings of all employees.The estimated additional yield in a full year, at the income levels of all taxpayers in 1979–80, would be about £3,950 million.