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London - London Mayor Boris Johnson has warned that thousands of high earning bankers will flee London because of the government's tougher taxes on bonuses.
In a letter to Treasury chief Alistair Darling released on Friday, Johnson sought an urgent meeting to discuss the introduction of new tax rates for top earners and a temporary 50 percent levy on bank bonuses above £2 000.
"You have made unilateral changes to taxation that risk damaging London's competitiveness and its status, alongside New York, as the world's leading financial-services center," Johnson wrote in the letter.
He estimated that around 9 000 bankers may relocate abroad, with knock-on effects on London's legal, accountancy, publishing and media industries and a reduction in the tax resources available to fund public services.
"The government is doing nothing more than fast-tracking the departure of this talent pool out of Britain and into the welcoming arms of our competitors," he added.
However, some lawmakers and analysts said Johnson's warning was undermined by plans announced by US President Barack Obama on Thursday to tax US banks to recoup the public bailout of foundering firms at the height of the financial crisis.
Obama is proposing a tax of 0.15 percent on the liabilities of large financial institutions. It would apply only to those companies with assets of more than $50bn - a group estimated at about 50.
New York Mayor Michael Bloomberg said Obama's plan might drive some financiers, and the large amounts of tax they pay, out of the city.
"If you tax Wall Street, you're taxing all of our firefighters, police officers and teachers because we just cannot afford to keep all of them working if our tax revenues go down and that's what would happen," Bloomberg said Friday on his weekly radio show.
"Now people aren't going to give up their American citizenship, but companies can move some of their business overseas very easily," he added.
Amid calls for British Prime Minister Gordon Brown to impose similar levies on British banks, John Mann, a member of the ruling Labour Party, said the new US tax had "delegitimised" claims bankers will flee abroad to avoid levies in Britain.
"I think it is an excellent plan and it opens up the possibility for the rest of the world - including this country - to do something similar," said Mann, who sits on the influential cross-party Commons Treasury Committee.
- AP
