As part of her campaign platform, Vice President Kamala Harris has advocated for a tax on unrealized capital gains from assets like stocks and bonds. The proposal, although not new, has faced opposition from both sides of the aisle, with some critics questioning its constitutionality.
Harris, the Democratic presidential nominee, has backed President Joe Biden’s tax increases outlined in the fiscal year 2025 budget proposal, which includes a plan to tax unrealized capital gains on individuals with net wealth above $100 million.
Many believe the proposal has little chance of passing Congress.
“It’s very complicated. It needs a lot of details to work properly,” said Garrett Watson, a senior policy analyst at the Tax Foundation.
Chief among them, he told The Epoch Times, is dealing with illiquid assets, or assets that are hard to value, such as private businesses.
The IRS would have to deal with valuations, he noted, to ensure that the tax is correctly calculated and paid.
Another problem is that the government has to provide credit for any losses investors face. That’s also in the proposal.
“In a downturn, when gains turn into losses, the government has to actually provide refunds back to these folks—write checks back to billionaires,” Watson said. “That doesn’t seem optically great.”