Sunday, 10 May 2009

Face. Bovvered.

I don't think anyone should lose any sleep at the news that a few hedge fund managers are threatening to leave the UK because of the new 50% top rate tax.

What are we actually going to lose if a few of them leave? The most positive thing you can about the social benefits of hedge funds is that they ought to contribute to financial market efficiency. On the assumption that this is the case, is the contribution a couple of them make of enough benefit to the UK to worry about them upping sticks? Especially since they can always bring their sparkle to the market from Zurich or wherever.

Whilst a company choosing to relocate production overseas can devastate an entire community, a hedge fund heading abroad is only likely to free up a nice office in Mayfair. And surely it would take a mass defection of funds before those that supply services to them really notice the difference, especially as again many of them can be supplied cross-border anyway.

So it's time the huffy hedgies put up or shut up. If you want to leave, get on with it, otherwise belt up and pay your taxes like everyone else does.

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