Britain's 50p top rate of income tax "can't go on forever" if London is to remain competitive as a world financial centre, mayor Boris Johnson has warned.
He also repeated his criticism of the Government's immigration cap which, he said, left employers "hacked off" that they could not bring talented people to the UK.
But the mayor said he was confident London had a bright future and pointed out that the threatened exodus of firms overseas had not taken place.
Mr Johnson told BBC Radio 4's Today programme: "I think we have got a great future. Obviously, I would say that, but it has the additional merit of being true.
"We have heard an awful lot about the stampede to Zurich, or wherever, but if you look at the numbers it hasn't happened – but we can't be complacent.
"We are in a battle, we are competing constantly with other growing centres of economic activity, but I think London is very, very well placed to do that."
He added: "It's no secret that I think in the long run a 50p tax rate is not going to be competitive with our major rivals. They all have lower top rates of tax now than the UK. It can't go on forever, in my view."
On the immigration cap, he said: "There is a risk that the necessity of putting up a public show of rhetoric will do possible damage to London's competitiveness. I think there is a case for flexibility and I think the Government understands that."
He said employers were "hacked off" that "they can't get talent in because of the new quotas".
The new higher rate of income tax affects those on six figure salaries and was introduced to try to spread the burden of pain caused by the Government's need to increase revenue and reduce debts.
The banking sector has also been the subject of calls for bonuses to be capped or taxed more heavily in response to the recent problems which brought some to the brink of collapse. Those suggestions have provoked speculation that some City institutions could move overseas.