Over the years, I’ve found myself discussing income tax rates with friends in the UK. They frequently mention that not only do they pay higher rates, but the highest income tax bracket is also fairly low by US standards. Given the looming elections in both countries, I finally got around to pulling tax tables for both.
Sure enough, the top bracket for the UK is fairly low by US standards! In the UK, the highest income tax rate of 45% kicks in at just over £125,140 (around $160,000). In contrast, in the US, the top rate of 37% only applies to income above $578,126. This doesn’t include additional taxes, particularly state income taxes for most US residents.
In the tech sector, salaries are significantly higher in the US, making it an irresistible magnet for UK tech talent. The higher earning potential and vibrant job market in the US, contrasted with the stalling UK economy, are likely to drain professionals from the UK, further boosting America’s tech dominance.
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