Kinky budget constraint

This post explains the previous one (I was googling "kinky budget constraint" and found the funny graph depicted in he previous post...)

My experience is that many people misunderstand taxation by brackets, and assume that the higher marginal tax rate associated with a higher bracket (say, for income taxation) must be paid on the whole income, so that earning one more €/$/£ results in owing a lot more than one more €/$/£ in taxes.

Thanks to The Economist, I have found an example of a very badly conceived taxation scheme where the higher tax rate in higher brackets applies to the whole income: stamp duty in the UK:

Observe the nice bunching of transactions (in blue) just below the thresholds...

Oh, and the new rate (which is nicely linear by parts) will decrease the stamp duty for 98% of transactions.