News that billionaire John Paulson, a lifelong resident of New York is exploring a move to Puerto Rico has set off alarms in many circles. It also got me thinking, this dovetails with my thoughts that we are seeing emerge a new class of "world citizen". His move would be in reaction to a new law in Puerto Rico that would eliminate taxes on gains from the $9.5 billion he
has invested in his own hedge funds, according to people who have
spoken to him about a possible relocation.
Paulson, 57, recently looked at
real estate in the exclusive Condado neighborhood of San Juan, where an
8,379- square-foot penthouse, complete with six underground parking
spaces, lists for $5 million.Ten wealthy Americans have
already taken advantage of the year-old Puerto Rican law that lets new
residents pay no local or U.S. federal taxes on capital gains, according
to Alberto Baco Bague, Secretary of Economic Development and Commerce
of Puerto Rico. The marginal tax rate for affluent New Yorkers can exceed 50 percent.
This story is newsworthy on two notes. One it shows how the wealthy, and people in general will shift or move away from areas that have policies they consider harsh to their existence or generally unfriendly, the other reason it should be noted is that it puts the spotlight on the difference between mere "working millionaires" and billionaires. When you have a lot of money and are massively wealthy you gain the ability to go where you are appreciated. People react faster and smarter then governments, expect the world to take note and respond accordingly.