Boldly done. (Great Britain's tax rates)

Economist (US), The, March, 1988

THE government has fulfilled its pledge of cutting the basic rate of income tax to 25p in the pound. When Mrs Thatcher took office in 1979 the rate stood at 33p. To live up to the billing of a tax-reforming budget, Mr Lawson had to do more than knock a couple of pence off the basic rate. He did, though his reforms were more modest than many had hoped.

He eliminated the four higher-rate tax bands of 45-60%, leaving just two rates, 25% and 40%. In 1979 there were no fewer than 11 income-tax bands and a top rate of 83% on earned income (and 98% on unearned income). In 1988-89 taxpayers earning up to around 120,000 a year will pay about 2% less of their income in tax. For those on [British pounds] 60,000 a year the gain is 10%. In terms of cash the gap is wider...

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