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Wall Street billionaire says he's eyeing move to Puerto Rico to avoid taxes

"It's the only place a U.S. citizen can go and literally avoid, legally, all their taxes," Paulson said at the Beryl Elite investment conference in Manhattan on Monday, according to Bloomberg News.

In 2012, hoping to rebrand itself as a "global investment destination" like its counterpart in the Cayman Islands, the island passed Act 22, legally making it the only place in the country where passive income from financial instruments like capital gains, interest and dividends go federally untaxed. Under the act, would-be Puerto Rico residents, possibly like Paulson, are only subject to taxes levied by the island, like sales tax and license fees, said Matt Fabian, a partner at Massachusetts-based Municipal Market Analytics. Even property tax has a 90 percent exception under the law, Fabian said in a telephone interview Tuesday with CBS News.

The act, officially dubbed the Act to Promote the Relocation of Investors to Puerto Rico, is not available to current island residents.

"You're sort of above it all," Fabian said. "It's a very lucrative tax package so as to attract 'richies' like Paulson."

Tim Holler