Before Bear fell on its face and people had other thngs to worry about, there were massive amounts of smack talk coming from both sides of the Atlantic about whether New York or London was the true financial capital of the world. A couple trillion in losses later and the battle is still on. But while the Big O administration is considering regulation that looks draconian, the UK is busy producing a veritable blueprint for how to drive top financial professionals (and their business) out of London and out of the EU.
On top of the 50% tax for those earning over £150,000/yr and the prospect that your compensation may be the lead story on the evening news, Prime Minister Gordon Brown has indicated that top earners at British banks may have to wait up to 5 years to collect half of their bonuses. With some London-based hedge funds already considering packing up and moving to less punitive locations, should this most recent series of suffocating regulatory proposals lead to a mass exodus to places such as New York, the UK government may inadvertently wind up providing the Big Apple and the US with a true stimulus package.
Posted by guest , Jul 16, 2009 2:39PM
1st cheers
Posted by guest , Jul 16, 2009 2:43PM
EU workforce is not that mobile outside of the EU
Squeeze them Gordon
Posted by guest , Jul 16, 2009 2:43PM
EU workforce is not that mobile outside of the EU
Squeeze them Gordon
Posted by guest , Jul 16, 2009 2:45PM
That’s the thing. The US is always the final refuge. Once the US follows Europe down the drain there won’t be anyplace left on Earth that a man can go and make his own way.
Posted by Novice , Jul 16, 2009 2:46PM
@2/3 Yeah, because it takes factories with thousands of employees to run a single fund in Mayfair.
Posted by guest , Jul 16, 2009 2:46PM
No, BLANUS, no.
Posted by mktmkr , Jul 16, 2009 2:49PM
Why would they move to NYC where they're gonna end up paying nearly 60% in tax to fund health care.
http://www.nypost.com/seven/07162009/news/regionalnews/dem_health_rx_a_poion_pill_in_ny_179525.htm?&page=0
Posted by guest , Jul 16, 2009 2:49PM
don't worry, we will all be given employee numbers under obama and will be taxed such that we all have the same net take home. bonus' and getting paid well for bringing in revenue are 'shameful.' paying for everyone's healthcare is 'moral' and 'responsible'.
Posted by guest , Jul 16, 2009 2:58PM
Stupid Brits
- a brit
Posted by american bandersnatch , Jul 16, 2009 2:58PM
@8 - Work brings freedom. We know what to do with those who complain.
Posted by guest , Jul 16, 2009 3:03PM
word on the street is the actual place they will end up is Geneva
Posted by guest , Jul 16, 2009 3:03PM
@1-5, 7-10 don't encourage him.
Posted by guest , Jul 16, 2009 3:08PM
Cayman's pretty nice.
Posted by guest , Jul 16, 2009 3:09PM
Looks like Greg has other "thngs" to worry about too. Like vowels.
Posted by guest , Jul 16, 2009 3:12PM
Greg,
Stop banging your Mom.
Dad
Posted by guest , Jul 16, 2009 3:13PM
Chamonix>Aspen
Monaco>Palm Beach
Plus, more eastern bloc pros...
Posted by guest , Jul 16, 2009 3:13PM
Mommy, they have been mean to me all day and keep picking on me and comparing me with that Levin girl. Please come and give me a hug and tell me I'm the best.
-Greg
Posted by guest , Jul 16, 2009 3:19PM
good riddance
Posted by guest , Jul 16, 2009 3:19PM
(!)
:
Posted by guest , Jul 16, 2009 3:20PM
good riddance
Posted by guest , Jul 16, 2009 3:21PM
I'll stimulate all of you just be patient.
greg's mom.
Posted by guest , Jul 16, 2009 3:25PM
key point here.... 50% tax, liberals take note.
Posted by guest , Jul 16, 2009 3:26PM
Greg can you pls buy me a nice firm cucumber and some olive oil please? Also pls buy some dinner, love you,
Mom
Posted by guest , Jul 16, 2009 3:30PM
Man that stinks for them. Not only do they have to do their financials with an abacus, now they are getting a 50% tax rate.
"That's why I'm proud to be an American..." You know how the rest of that song goes.
Posted by guest , Jul 16, 2009 3:35PM
@24 americans suck ass and they are fat and they fart constantly.
a londoner
Posted by guest , Jul 16, 2009 4:05PM
@25 that's why we live longer than you.
Posted by guest , Jul 16, 2009 4:06PM
Lived in London. The English smell bad, more than compensates for the farts
Soap...It's not just for Sunday
Posted by Anal_yst , Jul 16, 2009 4:24PM
@16 hits the nail on the head
Posted by guest , Jul 16, 2009 4:29PM
@25 Your "inexplicable insouciance" and disrespect is fascinating; it must be a English aristocratic thing.
Dan Loeb
Posted by guest , Jul 16, 2009 4:40PM
on a realistic level, how hard (beyond language barrier) would it be for a UK fund of 1-5 billion AUM to move to Switzerland?
Posted by guest , Jul 16, 2009 4:41PM
marissa miller did some pleasant photos for the british gq. why don't u use that as a pic. dumb anus
Posted by guest , Jul 16, 2009 4:53PM
Hungarian hotties in London is way sweeter than the hookers in NYC. That settles it. If still doubtful, go ask Eliot.
Posted by guest , Jul 16, 2009 5:20PM
once again greg places his stupidity on display - nfw anyone is going to move to nyc for tax reasons -
Posted by guest , Jul 16, 2009 6:05PM
Exactly. This Greg person really doesn't like using his brain. I hear Geneva is on the table, and I know one fund will be making pretty soon.
Posted by guest , Jul 16, 2009 6:05PM
Exactly. This Greg person really doesn't like using his brain. I hear Geneva is on the table, and I know one fund will be making the move pretty soon.
Posted by guest , Jul 16, 2009 6:13PM
I'm disgusted at our inept Gordon Brown & Alistair Darling - who clearly has no clue about financial markets. Rightly said, Brown is making the UK to be less competitive as possible. It is Switzerland that would be the new financial center of Europe,while NY would be undisputed No.1 for now. But big mega deals to come would still be driven from Asia & these companies may not necessary list in NY, perhaps Shanghai,HK etc. Hedgies in London with AUM 1-5b or more have already started to relocate to Zurich/Geneva but in subtle ways. These are not high profile relocation, but subtle moves - it goes by the announcement of opening an office in Zurich & they then quietly close their London offices.
This could be the biggest stimulus NY has received yet!!
Posted by Anal_yst , Jul 16, 2009 6:49PM
Why are these guys going to Switzerland, prey tell, when the US Gov't is starting to seriously crack the whip on the Swiss?
Posted by Bulging Bracket , Jul 16, 2009 8:09PM
@Analyst - They're going to Switzerland for the friendly tax regime for employees. There are huge benefits for everyone who is not an American to a Swiss address - Americans get screwed by global taxation irrespective of residency. Especially nice for Brits since you can be non-dom in both Switzerland and the UK if you do the travel right and have sufficient meetings/vacations elsewhere.
It's nice for the account holders too, but those worried about tax haven benefits would be invested through the offshore entity of the fund anyways. Again, the investors interests are secondary (but aren't they always).
This is all besides the point, since nothing said by Brown & Co needs to be listened to. The Tories are looking at something between a large and a stupendous majority next spring. Anything not enacted by Dec 31 won't be enacted and pretty much anything enacted recently will be overturned.
As mentioned above, this will also be driving an exodus from Manhattan - 60% tax rates are huge, you lose 1/3 of your net income moving from 39%. Sure lots of the really big earners are CT domiciled anyways, but this will do huge damage.
As a side note - Toronto is really nice. Real estate is cheap, it's just more than an hour to Newark on Porter (a 5 minute cab ride from your office downtown). Personal income taxes are lower, corporate taxes are far lower and no stupidity over offshoring. Final benefit to running your fund from Toronto - IRS can bully Switzerland but you can't bully such a huge source of oil, uranium, NG, and potash, plus there's the control of Chicago's easiest access to the ocean.
Posted by Bulging Bracket , Jul 16, 2009 8:10PM
@Analyst - They're going to Switzerland for the friendly tax regime for employees. There are huge benefits for everyone who is not an American to a Swiss address - Americans get screwed by global taxation irrespective of residency. Especially nice for Brits since you can be non-dom in both Switzerland and the UK if you do the travel right and have sufficient meetings/vacations elsewhere.
It's nice for the account holders too, but those worried about tax haven benefits would be invested through the offshore entity of the fund anyways. Again, the investors interests are secondary (but aren't they always).
This is all besides the point, since nothing said by Brown & Co needs to be listened to. The Tories are looking at something between a large and a stupendous majority next spring. Anything not enacted by Dec 31 won't be enacted and pretty much anything enacted recently will be overturned.
As mentioned above, this will also be driving an exodus from Manhattan - 60% tax rates are huge, you lose 1/3 of your net income moving from 39%. Sure lots of the really big earners are CT domiciled anyways, but this will do huge damage.
As a side note - Toronto is really nice. Real estate is cheap, it's just more than an hour to Newark on Porter (a 5 minute cab ride from your office downtown). Personal income taxes are lower, corporate taxes are far lower and no stupidity over offshoring. Final benefit to running your fund from Toronto - IRS can bully Switzerland but you can't bully such a huge source of oil, uranium, NG, and potash, plus there's the control of Chicago's easiest access to the ocean.
Posted by Bulging Bracket , Jul 16, 2009 8:13PM
damn double post. I reloaded twice to check that I hadn't...
Bess could you maybe fix the comments?
Posted by guest , Jul 17, 2009 12:14AM
Great post bulge. Regardless of doubling up.
Posted by guest , Jul 17, 2009 10:18AM
@10 commie or troll
Posted by guest , Jul 17, 2009 11:57AM
@10, socialism works so well right? that's why there is a waiting list in most countries with socialized medicine for basic procedures...oh yeah and the life expectancy is lower. we'll also attract the best doctors in a socialized medicine system right? how stupid are you?
Posted by guest , Jul 17, 2009 12:12PM
@43: I think @10 was being fecetious. As an aside, what are the chances we experience a G-shaped recovery?
Posted by guest , Jul 17, 2009 12:13PM
@43: I think @10 was being fecetious. As an aside, what are the chances we experience a G-shaped recovery?
Posted by guest , Jul 17, 2009 12:36PM
no recovery until asset prices come back down to earth. homes are still way to expensive relative to the average american's income. that goes for many other goods as well, cars, industrial products etc.