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Mr. Andrew Smith
To ask the Chancellor of the Exchequer if he will update his answer to the hon. Member for Newcastle upon Tyne, East (Mr. Brown) of 1 March 1994, Official Report, column 665, on income tax.[33904]
Mr. Jack
The change in tax by quantile group for 1995–96 compared with a 1978–79 indexed regime is in the tables. In table A, the comparison is hypothetical since, if an indexed version of the 1978–79 tax regime had prevailed over the past 15 years, the income base would not have grown as it has.
| Table A: Calculations using the 1995–96 income base | |||
| Quantitle group of taxpayers under the 1978–79 indexed regime | Number of taxpayers | Reduction in tax | Average reduction |
| Per cent. | Thousands | £ million | £ |
| Top 1 | 300 | 9,700 | 38,000 |
| Top 5 | 1,300 | 13,500 | 10,500 |
| Top 10 | 2,600 | 15,800 | 6,100 |
| Bottom 50 | 12,900 | 4,500 | 350 |
| All taxpayers | 25,700 | 30,700 | 1,200 |
| In contrast to these hypothetical figures, table B shows how the share of income tax actually paid by high income groups has risen since 1979, while the share of the income tax burden borne by low income tax payers has fallen. | |||
| Table B: Calculations using the income base for each year | ||
| Percentage | ||
| Share of income tax in | ||
| Quantile group of taxpayers | 1978–79 | 1995–96 |
| Top 1 | 11 | 16 |
| Top 5 | 24 | 33 |
| Top 10 | 35 | 44 |
| Bottom 50 | 18 | 13 |
| All taxpayers | 100 | 100 |