Tax experts are raising concerns over Democrat presidential nominee Vice President Kamala Harris’ proposal to tax unrealized capital gains, with some calling it “unconstitutional,” “unworkable,” and “economically destructive.” The tax policy proposal could increase taxes by $5 trillion over ten years, according to Breitbart News.
Harris mirrors many of the proposals from President Joe Biden’s 2025 budget proposal, which the Tax Foundation found would reduce Gross Domestic Product (GDP) by 1.6 percent, wages by 1.1 percent, and full-time equivalent jobs by 666,000. The trillions of dollars in proposed taxes would include a 25 percent minimum tax on unrealized capital gains for those making more than $100 million.
Americans for Tax Reform (ATR) cited a poll showing 76 percent of independents oppose taxes on unrealized gains. Even though Harris may be using populist proposals during her tight election against former President Donald Trump to boost her chances of winning, economic and tax experts believe they may have severe problems.
Adam Michel, the director of tax policy studies at the Cato Institute, told Breitbart News that Harris’ proposed tax on capital gains does not serve as any one component of the 11 measures federal agencies use to define income. He also described it as “economically destructive.
The Cato tax policy director found that taxing unrealized capital gains may give tax authorities significant headaches, such as appropriately accounting for losses when the value of an asset declines and requiring a refund system for some overpayments. The federal income tax, when it first started, exempted 99 percent of Americans from the tax.