We calculate the EFFECTIVE tax rates on labor income, as distinct from the STATUTORY tax rates. In doing so, we appeal to the literature on tax equivalence which suggests that an excise tax (including the VAT) is equivalent to a tax on labor income.
We also take into account the employee and employer contributions to national insurance (including the national health tax). We show that the effective average tax rate is significantly higher than the statutory rate, rising progressively from about 26% at low incomes to almost 60% at very high incomes.
