Hedge fund manager John Paulson "is considering becoming a resident of Puerto Rico," reports Bloomberg News, which quotes him as saying, "It's the only place a U.S. citizen can go and literally avoid, legally, all their taxes."
Something politicians may want to remember when they try to raise tax rates on very rich individuals is that those individuals are mobile and can afford multiple residences along with planes to ferry them from one residence to another.
If the U.S. went the route President Reagan preferred and made Puerto Rico a state, this particular tax break would probably have to go away. But rich people could and would still move to states that impose no state income tax.