The U.S. tax overhaul will provide a “short-term minor boost” to the economy that will ultimately fail to impact the nation’s economic, social and political issues, according to billionaire hedge fund manager Ray Dalio.
The legislation, which Congress passed this week, will do little to bolster investment and productivity in the long-term, he said in a LinkedIn post Thursday.
While changes to the corporate tax structure — including slashing the rate businesses pay to 21% from 35% — will make the U.S. a more attractive place to do business, the nation would be better off investing more in infrastructure and education, he said.
“While the tax bill will stimulate growth in the short term, we won’t get much long-term mileage out of it in comparison to paths to direct stimulus spending to areas that hit the core issues holding back U.S. productivity,” said Dalio, founder of the world’s biggest hedge fund Bridgewater Associates. “We’re still not dealing with the bigger issues.”
Politicians are failing to make crucial decisions based on the good of the whole, and are instead exploiting power dynamics to favor one group over another, he said.