From the FB cesspool of lazy economic thought there is this click bait making the rounds of the most fervent of my MAGA pals.....
Her unrealized TAX isn’t only applicable to your home. It’s applicable to any asset you own.
Car
Guns
Furniture
Jewelry
Art
Pensions
Stocks
Land and one of the biggest ones of them all 401K’s!
This precious nugget (likely the work of a Russian or Chinese Troll Farm) is hilarious. Thanks for bringing a grin to the face of this recovering financial guy.
It is important to note that, as always, major tax proposals like this face significant hurdles to becoming law. Even if Harris becomes President of the United States, any major tax changes that might impact entrepreneurship and venture capitalism would require congressional approval. Considering the deep divide in Congress the likelihood of a controversial proposal such as a tax on unrealized gains has an exceedingly low probability of passing into law.
So, aside from the fact that capital gains tax treatment does not apply to pensions, 401ks, IRAs and other retirement plans this presupposes the following:
Kamala Harris wins the Presidency.
The democrats win the House.
The democrats win the Senate.
The proposed legislation passes the House and Senate without any modification or mark-ups.
And President Harris signs it into law.
So, before my Face Book friends pee their pants over this; this is what it looks-like. (Edited for brevity):
- It applies only to individuals with at least $100 million in wealth (.01% of the population) who do not pay at least a 25% tax rate on their income (inclusive of unrealized capital gains). Payments can be spread out over subsequent years.
- Within that $100 million club, you'd only pay taxes on unrealized capital gains if at least 80% of your wealth is in liquid assets such as stocks, bonds and crypto currencies; not shares of privately-held business or real estate. One caveat for this illiquid group is that there would be a deferred tax of up to 10% on unrealized capital gains upon exit.
- In short, it would not apply to middle-income Americans like you and me. Or most startup founders or investors. If I had to hazard a guess, it singles-out top hedge fund managers.