Editing Harold Wilson (section)

====Taxation====
Wilson's government made a variety of changes to the [[Taxation in the United Kingdom|tax system]]. Largely under the influence of the Hungarian-born economists [[Nicholas Kaldor]] and [[Thomas Balogh]], an idiosyncratic [[Selective Employment Tax]] (SET) was introduced that was designed to tax employment in the service sectors while subsidising employment in manufacturing. (The rationale proposed by its economist authors derived largely from claims about potential economies of scale and technological progress, but Wilson in his memoirs stressed the tax's revenue-raising potential.) The SET did not long survive the return of a Conservative government. Of longer-term significance, [[Capital gains tax in the United Kingdom|capital gains tax]] (CGT) was introduced across the UK on 6 April 1965.<ref>{{cite web|url=http://www.warr.co.uk/Changes-To-Capital-Gains-Tax.htm |title=Warr & Co Chartered Accountants – Article – Changes To Capital Gains Tax |publisher=Warr.co.uk |access-date=20 April 2010 |url-status=dead |archive-url=https://web.archive.org/web/20090531082945/http://www.warr.co.uk/Changes-To-Capital-Gains-Tax.htm |archive-date=31 May 2009}}</ref> Across his two periods in office, Wilson presided over significant increases in the overall tax burden in the UK. In 1974, three weeks after forming a new government, Wilson's new chancellor [[Denis Healey]] partially reversed the 1971 reduction in the top rate of tax from 90% to 75%, increasing it to 83% in his first budget, which came into law in April 1974. This applied to incomes over £20,000 (equivalent to £{{formatnum:{{Inflation|UK|20000|1974|{{Inflation-year|UK}}|r=0}}}} in {{Inflation-year|UK}}),{{Inflation-fn|UK|df=y}} and combined with a 15% surcharge on 'unearned' income (investments and dividends) could add up to a 98% marginal rate of personal income tax. In 1974, as many as 750,000 people were liable to pay the top rate of income tax.<ref>{{cite web |url=http://www.ifs.org.uk/bns/bn25.pdf |title=IFS: Long-Term trends in British Taxation and Spending |access-date=6 August 2014 |archive-date=2 February 2015 |archive-url=https://web.archive.org/web/20150202090902/http://www.ifs.org.uk/bns/bn25.pdf |url-status=live}}</ref>

Various changes were also made to the tax system which benefited workers on low and middle incomes. Married couples with low incomes benefited from the increases in the single personal allowance and marriage allowance. In 1965, the regressive allowance for national insurance contributions was abolished and the single personal allowance, marriage allowance and wife's earned income relief were increased. These allowances were further increased in the tax years 1969–70 and 1970–71. Increases in the age exemption and dependant relative's income limits benefited the low-income elderly.<ref name="inequality"/> In 1967, new tax concessions were introduced for widows.<ref name="books.google.co.uk">{{cite book |last1=Thane |first1=Pat |last2=Evans |first2=Tanya |title=Sinners? Scroungers? Saints? |url=https://books.google.com/books?id=HZvhMJWK930C&q=harold+wilson+widows+tax+concessions+1967&pg=PA129 |url-status=live |date=May 2012 |publisher=OUP Oxford |access-date=1 November 2020 |archive-url=https://web.archive.org/web/20210417194151/https://books.google.com/books?id=HZvhMJWK930C&q=harold+wilson+widows+tax+concessions+1967&pg=PA129 |archive-date=17 April 2021 |isbn=9780199578504}}</ref>

Increases were made in some of the minor allowances in the 1969 Finance Act, notably the additional personal allowance, the age exemption and age relief and the dependent relative limit. Apart from the age relief, further adjustments in these concessions were implemented in 1970.<ref name="inequality"/>

1968 saw the introduction of aggregation of the investment income of unmarried minors with the income of their parents. According to Michael Meacher, this change put an end to a previous inequity whereby two families, in otherwise identical circumstances, paid differing amounts of tax "simply because in one case the child possessed property transferred to it by a grandparent, while in the other case the grandparent's identical property was inherited by the parent."<ref name="inequality"/>

In the 1969 budget, income tax was abolished for about 1 million of the lowest-paid and reduced for a further 600,000 people,<ref name="Crossman"/> while in the government's last budget (introduced in 1970), two million small taxpayers were exempted from paying any income tax altogether.<ref>"Le contrat dans les pays anglo-saxons: théories et pratiques" by Jean-Louis Breteau.</ref>