Ministers warned that tax traps are crushing incentives to work Experts say high marginal rates of tax are hitting incentives to work, with swathes of graduates facing a 55% tax trap. Economists and policy experts have warned the Treasury Committee over the impact of cliff edges in the tax and benefits system where small pay rises mean the loss of benefits or an increase in tax. Tom Clougherty of the Centre for Policy Studies said a 60% tax trap that kicks in once a worker earns between £100,000 and £125,140 is a “particularly nasty policy.” Mr Clougherty said that graduates with an income between £27,295 and £50,270 face a marginal tax rate of 55%, once income tax, NI contributions, student loan repayments and pension contributions are factored in. Helen Miller of the Institute for Fiscal Studies told the Committee it was “inexcusable” that the tapering of the personal allowance would leave a parent with two children earning between £99,000 and £130,000 worse off if they took a pay rise. She added it was “bizarre” that the threshold at which parents lose their right to child benefit had been frozen at £50,000