That it exists we know, where the peak is is arguable.
Earnings above £7,717 are briefly taxed at a rate of 12.1pc; above £7,769 this jumps to 22.7pc; then the combined tax rate shoots up to 40.2pc from £9,440, briefly reaching 57.8pc above £41,450; it then falls back to 49pc from £41,558; rockets to a bonkers 66.6pc from £100,000; falls back again 49pc from £118,880 and then settles at 53.4pc from £150,000. Labour’s 5p hike would push the combined tax rate above £150,000 to 57.8pc.
Diamond and Saez argue that in a system with tax allowances (ie, the ability to bugger off abroad, as we have here) the peak is around 54%.
We’re over that in parts of the income distribution.