- Republicans passed the Tax Reforms and Jobs Act this week, slashing corporate taxes while lowering them for some American individuals.
- Ray Dalio, the billionaire founder of hedge fund Bridgewater Associates, took to LinkedIn to voice his concerns about the new policies.
- He says the bill ignores key investments that will affect the economy’s future.
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, has some concerns about the GOP’s newly passed tax plan.
“When we look at the tax plan holistically, it looks to me like it’s a short-term minor boost to the economy that will have some minor positive longer-term impacts,” the billionaire wrote on LinkedIn Thursday.
Dalio expressed two concerns. First, the tax bill won’t have a significant impact on economic conditions for the bottom 60% of the Americans who are struggling. He said:
It won’t have any notable effect on our biggest economic, social, and political issue, which is the conditions of the bottom 60% and the growing disparity with the top 40% (especially the growing disparity between the bottom 90% and the top 10%).
And second, it doesn’t deal with the “impediments that are holding back investment and productivity in the US economy.” Specifically, Dalio points to two places where the government should be investing more money.
“The reforms to the structure of corporate taxes at the core of the bill will certainly make the US a more attractive environment to do business,” he said. “But the impact of those changes is likely to be small relative to the improvement that could be achieved by investing more in things like infrastructure and education, which more directly boost productivity.”
“There’s a tremendous opportunity cost arising from common sense sorts of things not being done or being cut back on-from not investing in infrastructure because of budget concerns and regulatory bureaucracy, to not improving education for similar economic and bureaucratic reasons. So we’ll do the tax adjustment tweak and the regulatory tweak-a little bit here and a little bit there-but we won’t change things materially. In other words, the headline is that we’re still not dealing with the bigger issues.”
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