> If I understand the linked chart, there are discontinuities in the <i>marginal</i> tax rate, not the effective tax rate.
True, but they are harsh discontinuities, sufficiently so to have the effects I described. And yes, there is a common combination of personal circumstances (high income plus student loan repayments plus child care subsidies) which means that any gross salary between £100K and £117K means less net income than being on £99,999 gross. I've not been able find a graph for that, but the maths checks out.
The result of this particular combination is to effectively impose a ceiling on many employees at £100K gross, because they would have to receive a greater than 17% pay rise to be better off than before.
True, but they are harsh discontinuities, sufficiently so to have the effects I described. And yes, there is a common combination of personal circumstances (high income plus student loan repayments plus child care subsidies) which means that any gross salary between £100K and £117K means less net income than being on £99,999 gross. I've not been able find a graph for that, but the maths checks out.
The result of this particular combination is to effectively impose a ceiling on many employees at £100K gross, because they would have to receive a greater than 17% pay rise to be better off than before.