Billionaire Ray Dalio May
Get His Tax Wish
Harry Dent | April 10, 2019 | Tax Day Monday. Have you filed yet? A tax professional friend of mine told me recently that he’s surprised every year to see how many people leave their tax filing to the last minute. Maybe they’re too busy. Maybe they live under a rock… Regardless, they can’t escape it. As U.S. citizens, we wear the IRS ankle brace wherever we go. So, when I moved to Puerto Rico in May 2016, the tax implications didn’t cross my mind. I packed up and shipped out to be closer to my vacation home on Culebra, not only to expedite its completion, but to enjoy it more freely. In hindsight, the move brought with it some much welcomed tax benefits… And with what lies ahead, I count my blessings for them. I have always warned that in the Economic Winter Season, as in the 1930s and now, taxes go up… often substantially. The Economic Fall boom creates financial asset bubbles that make the rich richer, faster. By 1929, the top 1% controlled 50% of the wealth and 20% of the income. Currently, they control 40% of the wealth and 15.9% of the income. Some studies put that control of wealth closer to 50%. When the great crash and deleveraging hits in the Economic Winter, those bubbles burst, sending those holding most of the assets through the ringer. They have the most going into the crash. They lose the most through the crash. Also, as the economic seasons change, the democratic party tends to take control because the extreme income inequality becomes increasingly intolerable for those on the wrong end of the arrangement. To reign in the rich, they raise marginal tax rates. The wealthy ended up paying as much as 90% on their income during the 1930s, although it’s hard to compare given that there were more deductions and loopholes back then. Unsurprisingly, Alexandria Ocasio Cortez, the young rising democratic congressperson, is recommending a 70% marginal rate on income over $1 million. Billionaires like Bill Gates, Warren Buffett, and even Ray Dalio are recommending increased taxes on the likes of themselves as well. Dalio was on 60 Minutes on Sunday talking to Bill Whitaker… READ MORE »
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