The UK has the taxation of non-doms. Wall Street has the tax policies of Barack Obama.
Admittedly, Obama isn’t threatening to whack a 30k tax on any overseas bankers who overstay their welcome, but according to US website Dealbreaker, his taxation intentions towards Wall Street aren’t entirely amicable.
According to Dealbreaker, even lowly associates will lose out to the tune of around $20k (10k) under Obama, who plans to end the social security cap and raise taxes on employers.
Greg Valliere, chief political strategist at the Stanford Financial Group, a private wealth manager in the US, confirms that Obama would be bad news for high earners.
“The top rate of tax is currently 35% and under either Clinton or Obama it’s a safe bet that it will revert back to the old top rate of 39.6% as scheduled at the end of 2010. There’s even a chance the very wealthy might end up paying more than that,” he says.
If Obama wins the Presidential election, Valliere predicts the cap on social security taxes, which is currently set at $100k, will rise to $120k.
“He will absolutely hit higher earners more than they’re being hit at the moment,” he predicts.
Does this mean Wall Street’s finest will flee to London where the proposed 30k non-dom tax is due to kick in only after seven years in residence? It’s unlikely.
“If an associate’s earning $150k a year, losing out $10k in tax might mean the difference between one Hamptons rental and another, but I seriously doubt it would change anyone’s lifestyle,” says former banker and author William Cohan.