Skip to main content

Income Tax

Volume 115: debated on Wednesday 29 April 1987

The text on this page has been created from Hansard archive content, it may contain typographical errors.

asked the Chancellor of the Exchequer what recent evidence the Treasury has compiled on the effect on total revenue of marginal reductions in the lower rates of income tax.

Since 1978–79, the basic rate of income tax has been reduced from 33p to 27p and the total

Top rates of income tax (per cent.)
1978–791979–801980–811981–821982–831983–841984–851985–861986–87
United Kingdom836060606060606060
Ireland606060606065656058
19791980198119821983198419851986
Belgium76·076·076·076·076·076·076·076·0
Denmark65·065·065·065·568·068·067·567·5
France60·075·066·070·070·067·065·058·0
Germany56·056·056·056·056·056·056·056·0
Greece64·064·064·064·064·063·063·063·0
Italy72·072·072·072·065·065·065·062·0
Japan84·084·084·084·084·084·084·084·0
Luxembourg58·058·058·060·062·063·063·061·0
Netherlands72·072·072·072·072·072·072·072·0
Portugal77·077·077·077·077·069·061·060·0
Spain66·066·065·068·065·066·066·066·0
United States of America55·555·555·555·555·555·555·555·5

Notes:

(1) The rates in the table are those applicable to employment income. Higher rates may apply to some or all investment income in Greece, Italy, Japan and Portugal.

(2) The rates are those applicable to a married couple. Higher rates apply to a single person in Portugal.

(3) The figures include local income taxes in Belgium, Denmark, Japan and the United States of America, at the following rates:

Belgium those payable by the majority of

Japan the population

Denmark: Copenhagen rates typical of

United States of America: California the whole country

yield of income tax is expected to be over £1 billion higher in real terms in 1987–88. Tax revenues have therefore remained buoyant over this period when tax rates have been reduced.

asked the Chancellor of the Exchequer if he will make a statement on the relationship between levels of income tax and total tax yield.

Income tax is expected to be 25·6 per cent. of total direct and indirect taxes in 1987–88 compared with 26·3 per cent. in 1986–87 and 32·8 per cent. in 1978–79.

asked the Chancellor of the Exchequer what information he has for each year from 1979 to 1986 about the top rates of income tax and the basic rates of income tax, in the United States of America, Japan, and, each of the member states of the European Economic Community.

The information requested on the top rates of income tax is given in the table. Amongst the countries concerned, the concept of a basic rate of income tax, as such, exists only in the United Kingdom and Ireland. The basic rates there have been:

United Kingdom

  • 1979–80: 33 per cent.
  • 1979–80 to 1985–86: 30 per cent.
  • 1986–87: 29 per cent.

Ireland

35 per cent. throughout.