There are multiple reasons, which I could think of, for not implementing such a move in any country.
- People will stop working hard, once they reach the max level.
- Companies growth just stagnates over a period.
- Fraud will be the final output from a nation.
- No Role models for upcomming generations.
If a capable gifted worker reaches the maximum earning threshold, the government rules ensure he doesn't produce any more. This is a negative for the country as a whole. If such an individual is allowed to grow further, he would venture into other areas and will take additional risks to produce better products. In the process, he will spend more on infrastructure and other goods, causing a natural growth in demand throughout the economy.
Companies cannot hire better management executives. There is no incentive for people to accept additional challenges, upon reaching the earning threshold. This stagnates the movement of skilled people venturing into unknown territories. Innovation takes a hit as people grow complacent to changes.
If a person reaches earning threshold, he starts to conceal some of his income, to save some additional money from the Tax Man. This causes lots of money being moved into the black market, essentially encouraging under the table transactions everywhere. There won't be any invoices for goods purchased or sold. The whole society moves into No invoice system. No one will pay any taxes. All business people will deal only in cash. Essentially encouraging to commit financial crimes to have what you earned legitimately.
Those who are slightly ethical will immediately start a company on his family members names and starts to move income to their partners/children's names/companies. Essentially, trying to escape from enforced threshold levels legitimately. Determining such actions is extremely complex and consumes a lot of resources, and often with family members being partners in crime, they aren't going to lose. People will find new ways to break the enforced threshold levels. (Not applicable for salaried people, but for those who are in business)
Cheating & fraud will be the only game in town, to survive. The one who cheats is allowed to grow more and the one who is honest will have to stay low. What message does it convey to the others of the nation? Cheating and fraud will propagate every nook and corner of the economy. If such a move happens, there isn't a way back to honesty. For-ever.
Ceiling one's income through taxation will have similar outcomes unless you let the individual keep some of his legitimate earnings.
If you don't let people grow, Musk would have ended his career at PayPal. There wouldn't be a "Tesla", or a "Solar City" or a successful space program. No Auto-pilot cars, etc. Today, he is a role model to millions. If you enforce ceilings on income, There wouldn't be any role models for future generations to emulate. There will be only fraudsters.