[stephenbez]

If I understand the linked chart, there are discontinuities in the marginal tax rate, not the effective tax rate. So in that case yeah at certain levels the amount you owe on each additional dollar goes up, but that would not mean that making 105k is worse than 100k unless the marginal tax rate is greater than 100%.

This ignores stuff like losing childcare subsidies that is likely not included on the graph.

In the us you hear stories of people decreasing their income to be in a lower tax bracket and often it is due to them not understanding that the tax brackets are for marginal tax rates.

[qazwsxedchac]

> 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.

[creer]

> there are discontinuities in the marginal tax rate, not the effective tax rate

This is often claimed. And the whole point of the article and much of this discussion is that no, there are often major steps / discontinuities in the overall tax rate. In the US, the many ACA discontinuities just by themselves are large and do not effectively pay attention to the bottom line. For that matter, I don't know of a single country or US state that actually "runs on effective tax rate". Which might be a solution to the problem if anyone were actually looking for a solution to the problem.