Billionaire Ray Dalio Warns Wealth Taxes Could Force the Ultra-Rich To Dump Assets, Prick the AI Stock Bubble

Billionaire investor Ray Dalio is warning that wealth taxes could force the ultra-rich to sell off big chunks of their holdings and help pop what he sees as an AI-fueled stock bubble.

The Bridgewater Associates founder says that kind of forced selling is an overlooked way a bubble gets pricked, reports AOL.

Dalio told Bloomberg in June and repeated the warning at Forbes’ Global CEO Conference in Singapore.

Says Dalio,

“You cannot spend wealth. You have to sell wealth to get money because you can only spend money. So when there’s a lot of wealth relative to the amount of money, there is a vulnerability.

Often that’s because of debt, but it could be because of wealth taxes, for example. Suppose that you put in wealth taxes; then those people that have wealth are going to have to sell some of that wealth to pay taxes.”

Many of the richest people keep only a small slice of their fortunes in cash, with most of it tied up in shares of companies.

Elon Musk, for example, says less than 0.1% of his wealth is held in cash.

A large tax bill aimed at the wealthy could push some of the biggest individual shareholders to sell at the same time and put pressure on markets.

Many states are currently considering wealth taxes.

Dalio says rising debt has brought the AI-driven market close to the point where the bubble bursts.

He also says recent months have shown the classic bubble signs that came before the 2000 dot-com crash and the 1929 Wall Street crash.

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