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Taxation And National Insurance

Volume 76: debated on Friday 29 March 1985

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asked the Chancellor of the Exchequer if he will now update his answer to the hon. Member for Birmingham, Perry Barr of 27 March 1984, Official Report, column 109, by giving information about the reductions in the basic rate of income tax which would be necessary to restore tax payments to their 1978–79 levels in 1985–86.

asked the Chancellor of the Exchequer what is the estimated yield from all sources of taxation, including excise and other duties, for 1985–86; what was the comparable yield for 1978–79 revalued at 1985–86 prices; and if he will publish a breakdown by categories of the real increase in taxes between 1978–79 and 1985–86, similar to that in his answer of 28 March 1984, Official Report, column 206.

The estimated total yield of taxes, local authority rates and national insurance contributions is £138 billion in 1985–86; the yield in 1978–79 revalued at 1985–86 prices using the GDP deflator is £109 billion. The other information requested is in the table.

£billion 1985–86 prices
Change on 1978–79
Income tax-0·4
Non North Sea corporation tax
North Sea taxes*+12·4
Capital taxes and stamp duty+0·6
NIC—employees+4·4
NIC—employers+1·1
NIS-3·9
LA rates+2·8
Taxes on expenditure+11·8
Total change†+29·0
* Before advance corporation tax set-off.
Components do not sum to total because of rounding.

asked the Chancellor of the Exchequer whether he will provide information on the net income after income tax, national insurance contributions and child benefit at (a) actual prices and (b) equivalent 1984–85 prices of typical household units (i) single, (ii) married couple, (iii) married couple with two children and (iv) married couple with four children, whose earnings from work are equivalent to the following points on the male earnings distribution: (1) lowest decile, (2) median and (3) highest decile for each year since April 1978.

Information in the following tables is based on estimates of earnings for those in full-time work paid at adult rates, with pay unaffected by absence. Estimates are based on information from the new earnings surveys.Income tax rates and allowances for April 1979 are those specified in the Finance Act 1979, later replaced by those announced in June 1979; for other Aprils, they are the rates and allowances for the financial year immediately following. Taxpayers are assumed to have no reliefs or allowances other than the appropriate personal allowance. National insurance contributions are at the contracted-in rate.The calculations take no account of means-tested benefits to which those at the lowest decile may be entitled. Changes in the purchasing power of net earnings have been calculated by reference to movements in the general index of retail prices between Aprils.

Earnings after income tax, National Insurance Contributions and Child Benefit

At current prices

At constant (April 1984) prices

At constant prices (April 1978=100)

At current prices

At constant (April 1984) prices

At constant prices {April 1978=100)

£

£

£

£

Single man

Married man

At the lowest decile gross earnings

April 197839·3570·71100·042·8476·98100·0
April 197944·0971·98101·847·9078·20101·6
April 198053·4771·70101·457·9277·66100·9
April 198157·6769·0297·662·1174·3496·6
April 198261·9567·7695·867·0373·3295·1
April 198366·9170·3799·572·7376·5099·4
April 198474·4374·43105·381·0781·07105·3

At the median of gross earnings

April 197856·29101·15100·059·78107·42100·0
April 197963·94104·39103·267·75110·60103·0
April 198078·52105·29104·182·96111·24103·6
April 198185·56102·39101·290·00107·71100·2
April 198293·00101·73100·698·8107·2899·9
April 1983100·64105·85104·6106·47111·97104·2
April 1984116·19116·19114·9122·82122·82114·3

At the highest decile of gross earnings

April 197885·50153·64100·088·99159·92100·0
April 197996·89158·17102·9100·70164·39102·8
April 1980123·64165·78107·9128·08171·74107·4
April 1981139·36166·79108·6143·81172·10107·6
April 1982151·76166·00108·0156·84171·55107·3
April 1983165·83174·41113·5171·66180·53112·9
April 1984196·55196·55127·9203·18203·18127·0

Married man with two children

*

Married man with four children

At the lowest decile gross earnings

April 197848·7187·53100·055·1599·11100·0
April 197955·9091·26104·363·90104·32105·3
April 198065·9288·38101·073·9299·11100·0
April 198171·6185·7097·981·1197·0797·9
April 198277·5384·8096·988·0396·2997·1
April 198384·4388·80101·496·13101·11102·0
April 198494·0794·07107·5107·07107·07108·0

At the median of gross earnings

April 197865·65117·97100·072·15129·66100·0
April 197975·75123·67104·883·75136·72105·4
April 198090·96121·97103·498·96132·70102·3
April 198199·50119·08100·9109·00130·45100·6
April 1982108·58118·77100·7119·08130·25100·4
April 1983118·17124·28105·3129·87136·58105·3
April 1984135·82135·82115·1148·82148·82114·8

At the highest decile of gross earnings

April 197894·86170·46100·0101·36182·15100·0
April 1979108·70177·46104·1116·70190·51104·6
April 1980136·08182·46107·0144·08193·19106·1
April 1981153·31183·47107·6162·81194·84107·0
April 1982167·34183·04107·4177·84194·52106·8
April 1983183·36192·84113·1195·06205·15112·6
April 1984216·18216·18126·8229·18229·18125·8

* Both children under 11.

Two children under 11, one child 11–15, one child over 16.

asked the Chancellor of the Exchequer if he will publish in the Official Report a table showing the comparison between the yield in real terms in 1978–79 and what he is now proposing for 1985–86 in (a) direct taxes including national insurance and (b) indirect taxes.

The information is in the following table:

Changes on 1978–79
£ billion, 1985–86 prices
Direct taxes*+16·9
Indirect taxes+12·1
+29·0
* Including employees' NICs.
Including employers' NICs.

asked the Chancellor of the Exchequer if he will construct an index, with 1978–79 equalling 100, of the changes in the level of income tax and national insurance contributions for each subsequent year for a taxpayer on (a) two thirds, (b) average, (c) five times average and (d) 10 times average earnings for households where the taxpayer is (i) single, (ii) married, (iii) married with two children and (iv) married with four children, and in all cases assuming that the wife does not work, in the manner of the answer of 23 November 1983, Official Report, column 171–2.

asked the Chancellor of the Exchequer if he will construct an index with 1978–79 equalling 100, of the changes in the level of income tax and national insurance contributions for each subsequent year for a taxpayer on (a) half, (b) two thirds, (c) average, (d) five

Multiple of average earnings
HalfTwo-thirdsOneFiveTen
(a)(b)(a)(b)(a)(b)(a)(b)(a)(b)
Single
1978–7923·6100·027·6100·031·5100·052·2100·067·5100·0
1979–8022·9102·626·3103·529·7104·442·8121·651·4151·9
1980–8124·7103·527·7104·930·7106·344·3122·552·1154·6
1981–8226·9100·129·6101·732·3103·546·4117·353·2150·5
1982–8327·3100·330·2101·733·0103·245·9119·453·0152·5
1983–8427·0104·530·0105·733·0107·145·1125·752·5159·5
1984–8526·4107·829·6108·832·7110·045·2128·452·6163·1
1985–8626·1109·829·3110·832·5111·945·3129·952·7165·2
Married
1978–7916·0100·022·0100·027·8100·050·5100·066·5100·0
1979–8016·0101·721·2102·726·3103·841·5120·350·7149·7
1980–8117·9102·722·7104·127·3105·742·9121·251·5152·4
1981–8220·898·725·1100·529·3102·545·2115·852·6148·1
1982–8320·899·425·4100·929·8102·544·6118·052·3150·2
1983–8420·1104·024·9105·329·6106·743·7124·351·9157·3
1984–8519·2107·724·2108·729·1109·943·8127·251·9160·9
1985–8618·7109·923·9110·828·9111·843·9128·851·9163·1
Married with 2 children (both under 11)
1978–792·5100·011·7100·020·9100·048·8100·065·6100·0
1979–801·4102·810·3103·319·0104·240·0119·150·0147·9
1980–814·9102·513·0103·520·8105·141·6119·850·8150·4
1981–827·399·515·0100·722·5102·543·9114·751·9146·3
1982–836·9100·615·0101·522·8102·843·2116·951·6148·4
1983–845·9105·514·3106·222·5107·242·3123·251·2155·4
1984–854·8109·313·5109·721·9110·542·3126·151·2159·1
1985–864·5111·213·3111·521·8112·342·4127·651·2161·2
Married with 4 children (two under 11, one 11–15 and one over 16)
1978–79-11·7100·00·4100·013·3100·046·7100·064·6100·0
1979–80-13·2103·1-0·6102·711·6103·638·5117·449·3145·6
1980–81-8·1101·73·3102·014·3103·840·3117·750·2147·8
1981–82-6·299·54·999·915·8101·742·5112·951·3143·9
1982–83-6·9101·04·7100·915·9102·341·8115·150·9146·0
1983–84-8·3106·13·7105·815·3106·840·9121·450·4152·9
1984–85-9·7109·92·7109·314·7110·240·9124·350·4156·5
1985–86-9·7111·52·6111·014·6111·841·0125·850·5158·6