US Top Tax Bracket Threshold Nears UK's in Dollar Terms, Highlighting Income Disparity

A recent social media post by James Clark highlighted a significant difference in the income thresholds required to reach the top marginal tax rates in the United States and the United Kingdom, noting that the UK's threshold is substantially lower when converted to US dollars. The tweet, dated November 2, 2025, pointed out that while the US top federal tax rate stands at 37% compared to the UK's 45%, the income level to incur this highest rate differs dramatically.

"The US top marginal tax rate is 37% vs 45% in the UK. But to hit that you have to be earning $625k. In the UK it's £125k ($165k)," James Clark stated in the tweet.

For the 2025 tax year, a single filer in the United States reaches the 37% federal income tax bracket at a taxable income of $626,351 or more. This figure aligns closely with the "$625k" mentioned in Clark's post. The US operates a progressive tax system with seven brackets, meaning only income above this threshold is taxed at the 37% rate.

In contrast, the UK's Additional Rate of income tax, which is 45%, applies to taxable income over £125,140 for the 2024/2025 tax year. Using a conversion rate of approximately 1.25 USD to 1 GBP, this translates to roughly $156,425, which is consistent with the "$165k" figure cited in the tweet, allowing for slight currency fluctuations or rounding. This means an individual in the UK earning significantly less than their US counterpart could face the highest marginal income tax rate.

The disparity underscores how different national tax policies define "high income" for the purpose of applying top tax rates. While the UK's highest marginal rate is numerically higher at 45%, the income level at which it applies is considerably lower than in the US, suggesting a broader base of high earners subject to the top rate in the UK compared to the US. These differences can have significant implications for high-income professionals and wealth management strategies across both countries.