Alistair Darling, the UK's Chancellor, is today expected to bring to the table a reform on the budget that will see banker's bonuses being taxed at 50% on anything over 20K GBP.
I am not sure if there is a topic on this already or if it's been debated to death but I wanted your opinions on how this will affect London's status as a major financial hub. Will we see hoards of bankers fleeing to Frankfurt or Paris? or even further afield to NY and Hong Kong? Maybe it's not a big deal and eveyrone will just deal with the tax increase or salaries will just get inflated and smaller bonuses will paid out?
RBS' board has already threatened to quit...interesting times indeed for the UK's financial services sector
I can't speak for everyone, but I know lots of people here who are looking very, very actively at getting out.
This is just a ridiculous idea anyway; especially when you consider contractually guaranteed bonuses, the costs of the tax will just be passed on to shareholders. It will just trigger an enhanced shift towards salaries, and then the proletariat will be outraged at high salaries, which is fitting, as the tax-deductibility of bonuses was part of what made them such a large segment of comp in the first place.
Anyway, I doubt I'll be working here in a year's time. I doubt the UK financial sector will even be relevent in five, as even the conservatives seem to have the same nutty ideas as labour.
It's a one-off tax. WIll people really exit en-masse because of that? I doubt it.
No one is exiting because of this one-off tax on shareholders, you're right. People are exiting because of 50% marginal taxes, excess regulation, and a hostile political environment (not to say that the rest of the globe is much better).
I concur. The Labour government have really fucked the UK up and the conservatives are just gonna top it off.
As for the one-off tax guy above, this is the UK. There is no such thing as a one-off tax, it will end up being a normal tax in a few years. Either way, this is just going to reduce tax revenues for the UK in the long run. Bunch of silly idiots.
Banks will simply shift more money to the base salary in response, so this proposal, which js already preposterous, is likely ineffective.
This is a one off tax. Darling and Brown will be out with the rest of Labour by May. Cameron and Osborne won't say it, but they know this is a stupid idea.
As to the 50% tax, I suspect that is only temporary. In addition, the US tax burden is almost the same. Whilst the US top rate is not 50% federally, the Obama top tax rate is due to be 39.6%. Plus if you are living in New York, you need to pay NY state tax and NYC tax. Britain does not have local governments. In the end, if you are making over 250k, your burden is the same, if not worse in the US.
New York has more structural problems to its status as a financial capital than does London
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