Banker Exodus Fails To Hit City

[Mikhail Liebenstein]

http://www.ft.com/cms/s/0/ce60a924-d880-11df-8e05-00144feabdc0.html?ftcamp=rss

A good article by the FT, just a small extract here, but worth reading the whole thing.

Banker exodus fails to hit City

By Megan Murphy, Investment Banking Correspondent

Published: October 15 2010 23:24 | Last updated: October 15 2010 23:24

Ever since last year’s one-off “supertax” on bankers’ bonuses was mooted, workers across the City have warned of an exodus from London as high earners relocated to financial centres with more favourable tax regimes.

Ten months on from the introduction of the controversial levy, however, far fewer bankers and traders have left the UK than some tax advisers initially forecast.

[Authoritarian]

Most of the super rich aren't based in the UK for tax purposes anyway, they could raise it to 100% and it would make little difference.

[Guest tbatst2000]

Most of the super rich aren't based in the UK for tax purposes anyway, they could raise it to 100% and it would make little difference.

That may be true when it comes to the likes of Philip Green but mostly doesn't apply to people generally considered to be 'bankers' - i.e. people who work for banks (and maybe private equity firms and hedge funds). The vast majority of them (and 100% of them in the case of all banks) are paid and fully taxed on that income in the UK. Some may be non-doms who can avoid paying UK tax on overseas investment income but they will still be paying full UK income tax on any money earned in the UK. The reason there hasn't been any exodus is simple enough: there isn't anywhere else, with the possible exception of HK, where they can go and earn more money overall. Taxes are broadly the same across most of the places in the world where there are large numbers of banking jobs as are incomes. In fact, taxes in New York - the most obvious place to go - are still higher (and have been for a long time) than London.

[@contradevian]

Clearly all the frauds and loopholes haven't been closed. Regulators asleep on the job as usual.

[Mikhail Liebenstein]

That may be true when it comes to the likes of Philip Green but mostly doesn't apply to people generally considered to be 'bankers' - i.e. people who work for banks (and maybe private equity firms and hedge funds). The vast majority of them (and 100% of them in the case of all banks) are paid and fully taxed on that income in the UK. Some may be non-doms who can avoid paying UK tax on overseas investment income but they will still be paying full UK income tax on any money earned in the UK. The reason there hasn't been any exodus is simple enough: there isn't anywhere else, with the possible exception of HK, where they can go and earn more money overall. Taxes are broadly the same across most of the places in the world where there are large numbers of banking jobs as are incomes. In fact, taxes in New York - the most obvious place to go - are still higher (and have been for a long time) than London.

Of course as HK could eventually come under more Chinese controls, it may not be such a good place to be caught committing fraud or running a Ponzi.

[exiges]

Clearly all the frauds and loopholes haven't been closed. Regulators asleep on the job as usual.

+1

[tim123]

That may be true when it comes to the likes of Philip Green but mostly doesn't apply to people generally considered to be 'bankers' - i.e. people who work for banks (and maybe private equity firms and hedge funds). The vast majority of them (and 100% of them in the case of all banks) are paid and fully taxed on that income in the UK. Some may be non-doms who can avoid paying UK tax on overseas investment income but they will still be paying full UK income tax on any money earned in the UK. The reason there hasn't been any exodus is simple enough: there isn't anywhere else, with the possible exception of HK, where they can go and earn more money overall. Taxes are broadly the same across most of the places in the world where there are large numbers of banking jobs as are incomes. In fact, taxes in New York - the most obvious place to go - are still higher (and have been for a long time) than London.

Actually they can go to Switzerland. There are some Cantons where foreigners can reduce their tax bill to about 10%.

tim

[SHERWICK]

Most of the super rich aren't based in the UK for tax purposes anyway, they could raise it to 100% and it would make little difference.

Bankers aren't the super rich - they're nowhere near.

[no accountant]

We've lost a few big names, like BlueCrest, a big hedge fund relocated to Geneva recently. We should be pulling big taxpayers in, not forcing them out.

To raise more tax revenue it's often better lower the tax rate, not increase it. Two rich people paying 30% is better than one paying 50%! (plus don't forget everything they buy has VAT payable etc)

Edited October 17, 2010 by no accountant

[DeepLurker]

We've lost a few big names, like BlueCrest, a big hedge fund relocated to Geneva recently. We should be pulling big taxpayers in, not forcing them out.

To raise more tax revenue it's often better lower the tax rate, not increase it. Two rich people paying 30% is better than one paying 50%! (plus don't forget everything they buy has VAT payable etc)

Why should we be encouraging an activity that is bleeding this country dry?

[Guest tbatst2000]

Actually they can go to Switzerland. There are some Cantons where foreigners can reduce their tax bill to about 10%.

tim

If by banker you mean someone running a hedge-fund then, yes, that's possible (e.g. didn't Brevan Howard move some people there already?). If by banker you mean someone working for any of the main banks involved in financial markets other than UBS and Credit Suisse it's not an option as those organisations don't have offices and infrastructure in Switzerland and probably never will. Those special tax deals are one-off negotiated and really are only for the super-rich too which, like it or not, does in fact rule out the vast majority of people working in finance.

[Guest tbatst2000]

Of course as HK could eventually come under more Chinese controls, it may not be such a good place to be caught committing fraud or running a Ponzi.

If you live in a fantasy world where all finance is somehow fraudulent then, yes, that may discourage some. If you live in the real world where the overwhelming majority of it operates well within the law - regardless of whether or not you think the law should be changed - then that's not an issue. Living in the most crowded place on earth (well it certainly feels that way even if it isn't technically) is much more likely to put people off in my experience.

[Mikhail Liebenstein]

If you live in a fantasy world where all finance is somehow fraudulent then, yes, that may discourage some. If you live in the real world where the overwhelming majority of it operates well within the law - regardless of whether or not you think the law should be changed - then that's not an issue. Living in the most crowded place on earth (well it certainly feels that way even if it isn't technically) is much more likely to put people off in my experience.

Depends on whether you consider the need for the bailout being commuted to the for a death sentence. In China the answers is a definite yes, local officials have been executed for far more trifling things.

[Redcellar]

Which tax havens aren't incredibly expensive to live in, and which 'could' you chose to live in without requiring a visa of some sort to live and work there?

Answers on a postcard please.

[Self Employed Youth]

These bankers who are rich compared to the wealth creating populous were so good at their jobs they nearly single-handedly destroyed the country. They have had to be bailed out by the taxpayers to such a degree that benefit cheats appeared to be like saints.

They extract wealth and create nothing but problems.

They wouldn't leave because they couldn't. They would be unemployable in a world where real work is valued.

[alexw]

We've lost a few big names, like BlueCrest, a big hedge fund relocated to Geneva recently. We should be pulling big taxpayers in, not forcing them out.

To raise more tax revenue it's often better lower the tax rate, not increase it. Two rich people paying 30% is better than one paying 50%! (plus don't forget everything they buy has VAT payable etc)

So them paying taxes on their ill gotten gains from trashing the country makes the situation an overall positive one for us??

what a load of ********.

Its the broken window fallacy.

If i steal from society or cause other severe economic harm but in doing so generate economic activity, and pay tax on what i make from doing this, its not a positive for that society.

Tax them until all these f'ing parasites leave. The sooner the better. We'd soon be better off.

Edited October 17, 2010 by alexw

[Mikhail Liebenstein]

These bankers who are rich compared to the wealth creating populous were so good at their jobs they nearly single-handedly destroyed the country.  They have had to be bailed out by the taxpayers to such a degree that benefit cheats appeared to be like saints.

They extract wealth and create nothing but problems.

They wouldn't leave because they couldn't.  They would be unemployable in a world where real work is valued.

Like a parasite saying it doesn't need its host.  It could find another host I suppose, but the Chinese at least use the political and financial equivalent of worming treatment to deal with corrupt bankers. 

The UK Banking sector is the biggest tape worm going.

[erranta]

Like a parasite saying it doesn't need its host. It could find another host I suppose, but the Chinese at least use the political and financial equivalent of worming treatment to deal with corrupt bankers.

The UK Banking sector is the biggest tape worm going.

'eckin hell - you're right!

'Worm' etymology

O.E. wurm, variant of wyrm "serpent, dragon,"

(Rev 12:9 And the great dragon was cast out, that old serpent, called the Devil, and Satan, which deceiveth the whole world)

During my travels around China every set restaurant menu came with a dish of . . . . . .

. . . . those white squigley (with texture of rubber) things, served on a bed of pak choi with tongue numbing hot chillie/sesame sauce on them.(like squid-but not squid)

The Chinese grub is generally not like what we get in the West!

[Protect Rural England]

http://www.ft.com/cms/s/0/ce60a924-d880-11df-8e05-00144feabdc0.html?ftcamp=rss

A good article by the FT, just a small extract here, but worth reading the whole thing.

Sorry but this is tripe.

Over the past few months it has become increasingly noticeable how many people have moved away.

Apart from the obviously wealthy who were already offshore, the next tier have gone. Now the 3rd tier are leaving and it is they who are noticeable by their absence.

The rest, well hey, they will not earn enough to make it worthwhile leaving and they couldn't afford to relocate with their families, so they are stuck.

Make no mistake, huge numbers have left. Not convinced? go to easy jet, ba, swiss air and see how full their planes are to gva etc