#1002 - Peter Schiff

**Joe Rogan** (0:07)
Boom, and we're live. Peter Schiff, how are you, sir?

**Peter Schiff** (0:10)
I am good, I am good. Thanks for having me back.

**Joe Rogan** (0:12)
Thanks for coming back.

**Peter Schiff** (0:13)
Yeah, it's been three years.

**Joe Rogan** (0:15)
It has been a while.

**Peter Schiff** (0:16)
You've grown a lot. I'm so impressed with what's happened to your podcast, your popularity.

**Joe Rogan** (0:21)
Thanks, man, thank you.

**Peter Schiff** (0:22)
Hopefully a little of that trickles down to me.

**Joe Rogan** (0:24)
I'm sure it will. You look good, dude, you look healthy.
You look vibrant.

**Peter Schiff** (0:27)
Well, you know, I got a little bit of a beard going. I've been living in Puerto Rico.

**Joe Rogan** (0:31)
Yeah, we were talking about that off air. Tell me about that. Like, what prompted that decision?

**Peter Schiff** (0:37)
Well, you know, I live in Connecticut, and unlike Southern California, where you are fortunate enough to still live, I lived here for a long time, years and years ago. But we have seasons, and one of them is winter, and it tends to be very long, and it normally kind of, you know, kind of moves into the fall and the spring a bit. And so I had been thinking for years about kind of splitting my time between Florida and Connecticut, because I love New England in the summer. It's beautiful this time of year. And I like the beginning of fall, you know, when the leaves are still on the trees and it's not that cold and it's pretty. And, you know, spring is nice too, but I can forget all the winter. So I was going to move to Florida until I found out about Puerto Rico.
And I found out about this actually because I read an article interviewing John Paulson.
And Paulson was-

**Joe Rogan** (1:25)
Who's John Paulson?

**Peter Schiff** (1:25)
John Paulson, billionaire, hedge fund guy, made a lot more money than me, shorting subprime. I did the same trade. I just didn't make as much money as he did, because I didn't start out with nearly as much money. But in any event, but he made a lot of money shorting subprime, and he's a hedge fund guy. And he was investing down in Puerto Rico. And I was like, oh, what's he doing? What's going on down there? And I found out, and I had never known this, that Puerto Rico as a US territory, Americans who live in Puerto Rico don't have to pay federal income taxes on the money they earn from Puerto Rico, which would include any of your capital gains on your investments.
And I'm like, wait a minute. I mean, all I have to do is move to Puerto Rico. I don't have to pay any federal income taxes, because anybody can move there. You don't need a work visa. You pick up and move there. It's just like moving to another state.
And so the minute you move there, you don't have to pay federal income taxes. But Puerto Rico has its own taxes. So you have to pay the Puerto Rico taxes instead. And up until recently, I mean, Puerto Rico's income tax, I think, tops out at 30%. It's still cheaper than the US, and there's no state income tax. That's all you've got, right, is the 30%.
But a few years ago, Puerto Rico got smart. And they said, well, how do we attract businessmen, entrepreneurs to move to Puerto Rico if they're not already here? Well, let's just drop that income tax down. And so they basically created these two laws, Act 20 and Act 22 And Act 22 is for individuals, and it says, hey, if you move to Puerto Rico, you have zero capital gains tax on any capital gains, and you have zero taxes on any interest in dividends that you earn locally.
And then they passed another act, which was Act 20, and they said, hey, if you open up a business here, you have a company, you're gonna pay a 4% corporate tax to Puerto Rico, and then you can pass on all the profits in dividends to yourself, tax free. No tax in Puerto Rico, no tax in the United States. And that's a great deal.

**Joe Rogan** (3:23)
That seems to be worth a tremendous amount of money. It is.

**Peter Schiff** (3:25)
I mean, it depends on, but you effectively double your income by moving there practically.
Wow. And so, because you're not splitting your income with the government.
And so, I checked it out when I heard about it. Because first it's like Puerto Rico, do I really want to live there? I'm thinking West Side story. I don't know much about Puerto Rico. But it's beautiful. I mean, I live in a town called Dorado Beach, and it's very, very nice, the weather and just the tropical location, and there's a lot of good people there. A lot of people have been moving there. Obviously, I'm not the first person to take advantage of this. And so there are a lot of people that have come from California to get out of California taxes, or the Northeast, the Midwest. Plus when you come from the Midwest or the Northeast, you also help yourself get out of the cold weather. California, it's pretty much all a tax thing. I mean, no one's leaving Southern California other than really taxes, because you've got such great weather here.