On the other hand London is more expensive than Silicon Valley and salaries are much lower. The correlation to cost of living is loose at best. In the case of Silicon Valley I'm convinced it's actually the tech money that raises the cost of living.

Salaries in Britain are in general lower than the US, especially as measured by purchasing power parity; the difference is about 30%. This is recouped in theory by the increased services provided by the British government (e.g. NHS and the Dole).

On the other hand, New York is more expensive than the Valley and salaries are, IIRC, even higher.

Actually this is a big misconception in UK/Europe. Unless you are a independent software contractor you get insurance thro your company in US. So the salary posted here excludes the benefits (insurance, vacation, 401k etc)...

IMO, with lesser US taxes & cost of living the US software programmer makes atleast twice than that of his eurpoean counterpart!

Even if you get it through your company sometimes, if not most of the time the employee is required to put in Y out of X amount where X is the amount of the plan.