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Earnings And Taxation

Volume 14: debated on Tuesday 8 December 1981

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asked the Chancellor of the Exchequer what percentage of gross earnings of a married man (a) earning average wages, (b) earning two-thirds of average wages and (c) earning twice average wages has been paid out in income tax and national insurance contributions in each year since 1970; and what will be the percentage in 1982 taking account of the increase announced by the Chancellor of the Exchequer on 2 December in National insurance contributions and assuming a rise in earnings of (i) 4 per cent. and (ii) 10 per cent. and indexation of tax allowances and bands.

[pursuant to his reply, 7 December 1981, c. 317]: The following table shows income tax and national insurance contributions as a percentage of gross earnings for a married man without children. The calculations assume that the taxpayer has no allowances or reliefs other than the appropriate personal allowances. National insurance contributions are at the not-contracted out rate. Average wages have been taken as the average gross earnings of full-time men whose pay was unaffected by absence; all occupations, all industries and services, Great Britain, monthly average for each financial year. The figure taken for 1981–82 is an illustrative estimate. For illustration, income tax allowances and bands have been indexed by 12 per cent. in 1982–83 and tax rates have been left unchanged.

Two-thirds average earningsAverage EarningsTwice-average earnings
1970–7121·225·828·9
1971–7221·525·528·1
1972–7319·424·527·7
1973–7421·025·628·4
1974–7523·928·731·3
1975–7626·030·934·8
1976–7726·231·135·9
1977–7822·428·232·7
1978–7922·228·031·6
1979–8021·426·428·9
1980–8122·927·529·9
1981–8225·329·432·4
1982–83
(i)25·329·832·4
(ii)26·030·332·8
(i) and (ii) correspond respectively to a 4 per cent. and 10 per cent. increase in earnings compared to 1981–82.