Hedge fund billionaire John Paulson, who famously bet against the housing market during the financial crisis, is now a prominent supporter of former President Donald Trump. The president’s proposed tax plan becomes a reality.
“They want to increase the corporate tax rate from 21% to 28%, increase the capital gains tax from 20% to 39%, and then impose a 25% tax on unrealized capital gains,” Paulson said in a statement accepted Friday. CNBC show “Money Movers” interviews Sara Eisen. “I don’t think there’s any doubt that if they implement these policies we’re going to see a market collapse.”
The Democratic presidential candidate proposed a 28% long-term capital gains tax on households earning $1 million or more annually, down from the 39.6% rate President Joe Biden enacted in his fiscal 2025 budget.
Meanwhile, Harris previously supported Biden’s proposed tax increases, which included a 25% tax on unrealized gains for households worth at least $100 million, the so-called billionaire minimum tax. However, people close to Harris’ campaign, including investor Mark Cuban, say she has no interest in taxing unrealized gains and there are doubts such a plan would pass Congress.
Paulson made a name for himself and made a fortune by trading massive bets on mortgage bonds before the financial crisis, using credit default swaps. The founder and president of family office Paulson & Co. has been a major donor to Trump’s 2024 presidential campaign. reportedly advised him On the idea of establishing a U.S. sovereign wealth fund.
The 68-year-old investor believes the economy could also quickly slip into recession if concrete plans to tax unrealized gains are implemented.
“If the Biden-Harris team does step in and they implement the policies of their platform, which is to tax unrealized gains, it will lead to a massive sell-off of homes, stocks, companies, art, which could… ..put us into a recession immediately, so hopefully if they get elected they won’t do that,” he said.
Some Wall Street economists and strategists do believe that raising the corporate tax rate from the 21% Trump cut could hurt earnings for S&P 500 companies and weigh on stock prices, but no major company has said it would lead to a correction as deep as that. Erson is describing.
There are also concerns that Trump’s economic plan will not be as market-friendly as Paulson believes, that the proposed tariffs will reignite some inflation, and that more tax cuts will expand the budget deficit.
Paulson owned by Trump It is said Trump, who served as Treasury Secretary in his second administration, said in an interview with CNBC that if the goals are correct, tariffs will not cause inflation. The investor also said lower taxes would spark economic growth, help increase revenue and close the deficit gap.
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