Income tax rates under old Labour in the '70s

In 1974 the top-rate of income tax increased to its highest rate since the war, 83%. This applied to incomes over £20,000 (£155,247 as of 2011),[2], and combined with a 15% surcharge on 'un-earned' income (investments and dividends) could add 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.[4] Margaret Thatcher, who favoured indirect taxation, reduced personal income tax rates during the 1980s.[5] In the first budget after her election victory in 1979, the top rate was reduced from 83% to 60% and the basic rate from 33% to 30%.[6] The basic rate was also cut for three successive budgets - to 29% in the 1986 budget, 27% in 1987 and to 25% in 1988.[7] The top rate of income tax was cut to 40% in the 1988 budget.