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Income Tax

Volume 977: debated on Thursday 31 January 1980

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asked the Chancellor of the Exchequer if he will provide the statistics given in his reply to the hon. Member for Ripon (Dr. Hampson), Official Report, 27 November 1979, c. 618, showing what percentage of the income of a married man, with two children, on average earnings, is taken in tax, but also taking into account social

Average production worker's wage in £ sterlingPercentage of income paid in income tax and social security contributions (less child benefit)
United Kingdom5,16717·2
Belgium6,68011·4
France5,4175·5
Germany8,40522·4
Ireland5,09016·7
Italy4,13614·7
Netherlands7,90522·7
USA6,52713·9
Japan6,96111·0
Notes:
1. Information on average earnings in the other EEC countries, the USA and Japan is not available. The comparison has been made instead for all the countries, except Denmark and Luxembourg, on the basis of the income of an average production worker.
2. Figures for the other EEC countries, the USA and Japan are United Kingdom Treasury estimates of APW wage levels as at 1 October 1979, based on OECD figures for 1978 earnings of an average production worker—estimates for Denmark and Luxembourg are not available. The United Kingdom figure is an estimate of the average wage of a male manual worker in manufacturing industry for September 1979, but this figure may be abnormally low because of the effect of the engineering dispute.
3. Currency conversions have been made at the exchange rates prevailing on 19 November 1979. The exchange rates between the United Kingdom and overseas countries may not fully reflect differences in consumer's purchasing power between the United Kingdom and those countries.
4. All figures relate to the tax year 1979 or 1979–80, except for France—1978—whose income tax rates are fixed in arrear.
5. The average production worker wage is assumed to be wholly employment income of the husband.
6. In computing tax liabilities, account has been taken of personal allowances and reliefs, employment income reliefs, minimum deductions for expenses, allowances for social security contributions and any other flat rate reliefs against employment income. The calculations also take into account income from child benefits and analogous receipts overseas. Any child benefits receivable have been set off against income tax and social security contributions and the resulting net figures expressed as a percentage of gross income.
7. For the United Kingdom, it has been assumed that the employee is contracted in to the new national insurance pension scheme.
8. Local income taxes have not been taken into account.