alt Hacker NewsThe income tax in UK has this quirk: once you fall near the top tax bracket, you retrospectively lose all tax-free allowances you could have availed, had you not fallen in the top tax bracket.
Likewise, once corporations blow past a revenue cap, they shouldn't be eligible for lower rate of corporate tax. If the US is any cautionary tale (it always is), it's a moral imperative not to let corporations get too big. Letting corporations grow big and still avail tax cuts, is like feeding your own cancer.
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it's very attractive to try and build a progressive tax system that swings too far the other way too. Economically some sort of tax free base and a flat rate is the best but politically it's way better to attack here and carve out these exemptions... the biggest winner is tax prep software.
In reality though it isn't implemented as you described. In reality it is merely that there is a 62% marginal rate from 100k to 100k + 2x the personal allowance.
They do this with sole traders who face a £14k (~$20k) slab tax bill (VAT) if they go from £85k to £85,001 (~$100k). The outcome has been near total depletion of skill tradesman "mate" apprenticeships. Since such people (not being totally stupid) take 3 months off per year or work 4 days per week and turn down jobs.