Every time I think that Bloomberg has the potential to become in interesting news service, financial or otherwise, they decide to come up with something else entirely. Like today’s preposterous article about American expatriates apparently abandoning London in droves. It’s not that it’s wrong, exactly–it’s that it leaves out all the detail that would make the article make sense. It’s got a stupid title, to begin with–Elle Macpherson Can’t Counter London Gloom as Americans Flee–and goes downhill from there:
- Andrew Wesbecher moved to London from New York in 2006 to sell software to banks and hedge funds. This month he joined the exodus of American expatriates fleeing high taxes and the city’s shrinking financial industry.
“I’m the last guy to leave that I know,” said Wesbecher, 29, who worked for Tibco Software Inc. and lived in Notting Hill, the London neighborhood that’s home to billionaire Richard Branson and model Elle Macpherson. “We are all packing up.”
Well, actually, Andrew, you’ve all been packing up for the past year, at least, as companies cut back on their expat packages. Expats are expensive for American companies, and many are discovering that they don’t need to send American staff over as much–British staff will do just as nicely. And doesn’t Branson live in Holland Park?
- The number of U.S. citizens in Britain fell 3.8 percent to 126,000 in the 12 months through September, according to the Office for National Statistics. The trend probably continued this year, with the Confederation of British Industry estimating the U.K. financial industry will lose about 45,000 jobs in the first nine months of 2009, or 4.3 percent of the total.
You know, that’s still a whole lot of Americans in London. Probably far too many, certainly for my taste. Especially since so many of them don’t actually want to be here, and whine about it all the time. Me, I like it here. I manage to stop conversations all the time by stating that I like living here because I like the food and the weather.
Authors Tommy Stubbington and Andrew MacAskill drop their first ball in the next paragraph:
- Americans are heading home as Britain plans a 50 percent tax rate for those who earn more than 150,000 pounds ($248,000) a year and employers cut benefits for workers living abroad, reducing the allure of London. That comes a year after the U.K. said foreigners who have lived in the country for more than seven years must pay 30,000 pounds annually or give up the special status that shields overseas income from British taxes.
Well, lets add a little context here just so everyone knows what’s going on. Expats are expats because they are not local hires. They have special packages, which can be quite generous. Most importantly, they don’t get their paychecks here in the UK. So expat salaries actually count as overseas income. And this can often be a whole lot of money. And since it’s overseas income, it gets treated differently in the UK tax system–so expats get something of a free ride here. And since expats generally get all their expenses covered as well–rent, transport, the guaranteed two trips a year back to the US, school fees–it’s a pretty cushy deal. What the UK is doing here is trying to do what the US does, actually. That’s not the only error here–that 50% tax on incomes over £150,000 is bit more complicated as well. Like the US, the UK has a graduated tax system–incomes under a certain level are taxed at a low tax rate, and as incomes rise, amounts over certain bands are taxed a a higher level. So what is actually happening is amounts over £150,000 are being taxed at 50%, up from the current 40% rate. But everything below that is still taxed at the existing rates. So we’ve got two slippery items here already, and we’re only in the fourth paragraph. It goes downhill from here, though:
- “Expats feel the tone has changed; it’s less welcoming,” said Mark Tilden, a consultant at CRA International Inc. who wrote a report for the City of London last year on the impact of taxation on corporate relocation decisions. “London’s ability to attract talent has gone down.”
Hmmm. As far as anyone can tell, London continues to attract millions a year from Commonwealth countries, and elsewhere, who are perfectly happy to live and work here. And you know what? They’re pretty talented. But if by “talent” we mean those folks who brought us to the brink of economic disaster last year, maybe we could use a bit less of it. The bank whose London office I worked for until 2006 was actually doing quite well until they sent a bunch of Americans over to run things–that’s when it blew up. But don’t worry, American exceptionalism will always be with us:
- Janet Sherbow lives in London’s Chelsea district with her husband, Nikos Mourkogiannis, the former chief executive officer at the European arm of Cambridge, Massachusetts-based management consulting firm Monitor Co. The family plans to move to Greece after their daughter finishes high school next year.“We are fed up with all the stealth taxes, the non-doms levy, and now the 50 percent tax rate,” Sherbow said. “Six American families have moved from my street in the last six months.”
I particularly like the “fed up” part. This is the world’s greatest city, with an unparalleled range of cultural offerings, and is one of the most livable cities in the world as well. What’s the problem?
Part of he problem is that companies are clearly cutting back on the generosity of the programs for those who still get expat packages:
- Forty-one percent of employers plan to review expatriate programs, according to a study by KPMG International. KPMG surveyed about 100 companies, 60 percent based in the U.S., and found that 22 percent had recalled overseas workers or turned them into local employees in the past 12 months.
As I said, these programs are expensive for companies to run. And Janet? Those six families? They were probably sent back. That’s part of the deal with being an expat–you can get sent back to the US at a moment’s notice. And you better believe that’s been happening. That doesn’t stop the whining, though:
- Huddling under an umbrella during a July downpour, Wesbecher said he was no longer willing to put up with the frustrations of life in London after his commissions dropped and Palo Alto, California-based Tibco eliminated his expatriate benefits, cutting his take-home pay by 75 percent.“This is what passes for summer in London,” he said, sipping an iced latte in the city’s main financial district. “The quality of life is a lot harder. Things are more expensive and the houses are smaller. Even public transport is cramped. A New York subway car is like real estate in comparison.”
This guy is a moron, clearly. Has he been on New York public transportation recently? And, you know, the economy sucks, so of course his commissions are down. Welcome to the real world, pal. Consider yourself lucky to still have a job. And expensive? Yes. But with all these Americans leaving, housing will get a bit cheaper, as will everything else. That’s fine with me. It was all of them coming in in the first place that helped drive prices up.
At this point you have to wonder if Stubbington and MacAskill are having a send-up here–the Americans they quote appear to be uninformed, uninteresting, self-absorbed, and about the whiniest bunch I’ve come across in a long time. Really, who would want these people around? And the article’s end does not disappoint:
- Wesbecher isn’t convinced the boom times will return.“The ethos of the ambitious, high-earning American is ‘I will do anything to make money, even if it means moving my family,’” he said. “When the performance bonuses go away, the value of being in this country goes away.”
What a putz. Look, there are plenty of Americans who live here in London, and who wouldn’t dream of living anywhere else. Make it easy on us and go home, please. Soon.
Categories: scholars and rogues