Opinion
By Steve Nicklas, 9-30-24
Legendary investor John Paulson sees a “sell” signal the size of the World Trade Center on the horizon. The blinking-red warning sign is Kamala Harris becoming president.
Paulson is a heralded hedge-fund manager who anticipated the sub-prime mortgage meltdown in 2007 and played it like Beethoven on his piano. So he’s accomplished. With a record as remarkable as Beethoven’s Symphony No. 5.
Not only is Harris ill-equipped in the categories of experience and knowledge, but her tax policies resemble communist dictates. And this scares even the seasoned, level-headed Paulson, who is normally as composed as a Beethoven concerto.
“I’d be very concerned if Harris is elected and pursues the tax and economic plans that she articulated,” Paulson said in an interview on Fox Business. “I would pull my money from the market.”
And the billionaire Paulson has a hiding place for his money. “I’d go into cash, and I’d go into gold,” he said, “because I think the uncertainty regarding the plans they outlined would create uncertainty and, likely, lower markets.”
Paulson’s comments are not hyperbole. Investors everywhere share the same unease. Harris’ policies would lead to substantially higher taxes, on income and on capital gains. And for both personal and corporate taxes.
But she’s not stopping there. Harris is pushing an unprecedented tax on unrealized gains, a policy endorsed by hard-left zealots like Elizabeth Warren. A new tax as high as 25 percent.
This tax would be paid on appreciating assets, whether homes, securities, real estate investments, etc. Even if you don’t sell them and “realize” the gain in a given year. The taxes are aimed at the wealthy, but would trickle down to others.
The ripple effects of such draconian measures would be devastating. Paulson envisions “mass selling of almost anything,” including stocks, bonds, homes, artwork, etc.
“I think it would result in a crash in the markets,” he said, “and an immediate recession.”
Paulson has ties to Florida. His investment management firm recently opened an office in West Palm Beach. He personally owns a $110 million mansion in Palm Beach.
“West Palm is rapidly becoming an important financial center,” Paulson told Bloomberg. Actually, the Southeast Florida corridor from West Palm Beach to Miami has earned the nickname “Wall Street South.”
Paulson supports the pro-business campaign of Republican frontrunner Donald Trump, who is also a billionaire. Meanwhile, Harris’ ultimate goal is to re-distribute wealth, or equity, to poorer people.
Following the destruction of Hurricane Ivan several years ago, Harris called for releasing FEMA funds to poorer people first. We can only imagine how she would manage FEMA, which the president controls. Red-state Florida might have a long wait for federal funds after a hurricane under Harris’ administration.
Paulson points to the stark differences in tax policies between Trump and Harris. They are as different as a man and a woman, before the DEI lunacy blurred the lines.
Trump wants to continue the 2017 tax cuts implemented during his presidential term; Harris has echoed Biden’s calls to let the Trump tax cuts expire next year, even though they have ushered in prosperity.
Harris has been inconsistent with her messaging. Her policies change like the direction of the wind. She floats the idea of price controls at the grocery store, for instance, and then backs away when the public and her media allies resist.
In more taxpayer-funded giveaways, Harris wants to give free money to first-time homebuyers. Government-style giveaways are inflationary, by the way. Look at where we are now. But that’s the Democrat way: tax, spend, regulate.
So today’s Democrats are like Robin Hood. Taking from the rich and giving to the poor. Just as long as they stay in power — and become rich.
But these heavy-handed, authoritarian measures have consequences. Electing Harris will have economy-shattering repercussions, especially for the financial markets.
Just ask the prescient investor who saw the sub-prime collapse coming – when no one else did.
Steve Nicklas is a financial advisor on Amelia Island and an award-winning columnist. His columns appear in weekly newspapers in Northeast Florida. He has published a book of his favorite columns, “All About Money.” He has also done financial reports for area radio stations. He can be reached at 904-753-0236 at [email protected].
The views expressed in this commentary are those of the author and do not necessarily reflect the official position of Citizens Journal Florida
