The Biden administration’s proposal to tax unrealized investment gains, which the Harris campaign has voiced support for, is “insane” and “absurd,” the economist told Fox News Digital.
The Biden-Harris administration’s Treasury Department released its revenue proposal for fiscal year 2025 in March. The list of tax proposals includes a plan to include unrealized investment gains in taxable income for people with net worths of more than $100 million. The move to tax unrealized gains is in line with the Biden-Harris administration’s pledge to raise taxes on the wealthy and corporations.
Meanwhile, the Harris-Waltz campaign He reportedly told Mark Goldwein: The vice chairman of the Committee for a Responsible Budget said he fully supports President Joe Biden’s proposed tax increases on high-income earners.
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“The proposal would impose a 25 percent minimum tax on gross income, including generally unrealized capital gains, on all taxpayers with assets (i.e., liabilities minus assets) exceeding $100 million,” the Treasury Department said in a statement. FY25 Revenue Proposal. A similar proposal has been put forward by the Biden-Harris administration. 2024 and 2023, However, the minimum tax rate was 20%.
“this [proposal] “This is insanity,” said EJ Antoni, a public finance economist at the Heritage Foundation’s Grover M. Herman Federal Budget Center. “This proposal by Harris’ cronies would literally force people to sell a portion of their investments each year to pay taxes on unrealized gains. Until the asset is actually sold, any increase in value is purely speculative. It’s not real, so it falls into the category of unrealized assets. The people pushing this idea show a complete ignorance of both finance and economics.”
The Treasury Department, seen near the sunset in Washington, D.C., manages the finances of the federal government and is responsible for the collection of taxes, currency management, and expenditures. It also enforces the nation’s financial and tax laws. (AP Photo/John Elswick, File)
Despite concerns about the proposal, others welcome the idea of new taxes on wealthy Americans, corporations and business owners. After learning that the Harris campaign supports all of Biden’s tax hikes on high-income earners and corporations, University of California, Berkeley economist Gabriel Zucman wrote: I wrote to X, “Let’s get started!” “And, of course, this includes the astonishing 25% millionaire’s tax,” he pointed out.
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In a statement to Fox News Digital, Zucman reiterated that the unrealized gains tax proposal is “important” because it addresses “a fundamental problem with our American tax system: billionaires get away with paying very little tax while everyone else has to pay tax.”
“This proposal is targeted at the super-rich,” he argued.
But the measure also has implications for businesses, according to Richard Stern, director of the Grover M. Herman Federal Budget Center.
“Taxes on unrealized gains may be filed by individuals, but those taxes are actually paid by the workers and customers of those businesses in the form of reduced economic growth,” Stern said.
“Ultimately, the unrealized profits tax falls heaviest on the companies with the highest price-to-earnings ratios — that is, the companies with the greatest potential for future growth and innovation. So it’s really a tax on optimism and innovation.”
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A woman prepares her tax return ahead of the April filing deadline. According to the Treasury Department, the federal government collected $4.44 trillion in taxes in 2023. (Kurt “Cyberguy” Knutson)
Stern said, Multinational technology company NVIDIA This is an example of how speculating on unrealized profits can be problematic for a company. Nvidia’s market capitalization has grown from roughly $1.18 trillion to $3.16 trillion this year, Stern said. He added that if the proposed tax were extended to all unrealized profits, it would result in a $495 billion tax bill for shareholders for a company with an annual return of just $40 billion.
Stern concluded that the tax was an “unreasonable” measure and argued that this proposed redistribution of productive forces, if implemented by a Harris-Waltz administration, would be a “blatant obstruction to socialism.”
President Joe Biden raised the hand of his vice president and Democratic presidential nominee, Kamala Harris, at the Democratic National Convention. (AP Photo/Jacqueline Martin)
In a statement Friday, Trump said of the proposed tax on unrealized capital gains: “In other words, appraisers would make a killing, and soon this will apply to small business owners too, forcing you to sell your restaurant immediately, and the new owner would not be able to do the work, and the restaurant would close.”
Meanwhile, Antoni argued that such a tax could also roil financial markets by forcing investors to “sell everything at rock bottom prices to avoid the tax,” which would also cause market valuations to plummet.
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“Such extreme fluctuations, even if predictable, can be highly inefficient and have devastating second-order effects.”
