John Paulson, the New York hedge fund manager who made billions short selling subprime mortgages in 2007, is reportedly looking for a new home with a zero-percent capital gains tax rate: Puerto Rico.
The 57-year-old founder and president of Paulson & Co., which has $18 billion under management, including $9.5 billion of Paulson’s own stash, is said to be looking to buy a $5 million, 8,379-square-foot penthouse in the posh Condado barrio of San Juan, according to Bloomberg, citing four people who have spoken with him about relocating.
Moving to the commonwealth became much more appealing to America’s wealthy elites after the country passed a law last year that does what many pro-business Republicans have been wanting for years: a complete elimination of taxes on profits earned from investments.
The Queens-born native New Yorker, who once donated $100 million to conserve Central Park, chided Occupy Wall Street activists in October 2011 by pointing out that the city’s top 1 percent income earners pay 40 percent of state and local income taxes. He said that instead of “vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.”
In its own effort to attract high-net-worth individuals, Puerto Rico passed a series of reforms, including the Individual Investors Act, which qualified anyone who hasn't been a resident of the territory but does so before the end of 2035 to receive some of the most beneficial tax relief in the nation.
Without elaborating, Alberto Baco Bague, secretary of Economic Development and Commerce of Puerto Rico, told Bloomberg that 10 wealthy Americans have already relocated to the commonwealth to take advantage of the enticing tax breaks.
Meanwhile, Puerto Rico continues to receive billions in federal tax dollars. According to an analysis by the Economist, the commonwealth received $182 billion more in federal dollars between 1990 and 2009 than it paid in taxes.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...