TLDR:
Kamala Harris supports Biden’s proposal for a 44.6% capital gains tax
The proposal includes a 25% tax on unrealized gains for high-net-worth individuals
Harris also proposes increasing the corporate tax rate to 28%
The Democratic Party platform calls for a 25% minimum tax on billionaires
These tax proposals face significant challenges for implementation
Vice President Kamala Harris has thrown her support behind President Joe Biden’s proposed tax reforms, including a significant increase in capital gains tax rates and a new tax on unrealized gains for wealthy individuals.
These proposals, part of the Democratic Party’s platform for the 2024 election, aim to increase revenue from high-income earners and corporations.
The Biden administration’s budget proposal includes raising the long-term capital gains tax rate to 44.6%, which would be the highest in recent history.
Also a 25% tax on unrealized capital gains for individuals with over $100 million in wealth is being considered.
This measure would mark a departure from current tax law, which only taxes gains when assets are sold.
Harris’s campaign has confirmed her support for these tax proposals, along with additional tax reforms. These include an exemption for tipped workers, a $6,000 tax credit for parents of newborns, and an expanded child tax credit. The Vice President has also proposed increasing the corporate tax rate from 21% to 28%, partially reversing the tax cuts implemented under the Trump administration.
The Democratic Party platform document released ahead of the 2024 election explicitly mentions the goal of making billionaires pay a minimum income tax rate of 25%. The document claims this would raise $500 billion over 10 years. It also calls for ending preferential treatment of capital gains for millionaires, aiming to tax investment income at the same rate as wages.
These tax proposals have sparked debate and criticism. Some economists and tax experts argue that taxing unrealized gains could face legal challenges and may be difficult to implement. The Supreme Court has not directly ruled on the constitutionality of a federal wealth tax, but recent cases suggest potential skepticism from some justices.
Critics of the proposals argue that such high tax rates could discourage long-term investment and potentially harm economic growth. There are also concerns that these measures could push investors and businesses to seek opportunities outside the United States.
Supporters of the tax reforms, including some economists and progressive politicians, argue that these measures are necessary to address wealth inequality and ensure that the wealthiest Americans pay their “fair share” in taxes.
These tax proposals would likely face significant challenges in Congress, even if Democrats gain control of both chambers. The proposals represent a major shift in tax policy and would likely face strong opposition from Republicans and some moderate Democrats.
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