The moderate evolution of nominal pay created a virtuous cycle in which the economy’s competitiveness improved and total employment rose. As I outlined earlier, the public finances were put on a more stable footing while, over time, the income tax burden was reduced significantly.
In 1988, the standard and higher rates of income tax were 35 and 58% respectively; for the tax year which began in April 2000, the corresponding rates are 22 and 44%, and the income level at which the higher rate in particular is applied has been increased significantly.