Key Points
- Misinformation circulated about Kamala Harris endorsing a 25% tax on unrealized capital gains proposed by President Biden for 2025.
- Clarification reveals Harris’ team did not endorse, comment on or reference the proposal.
Recent rumors accused presidential candidate Kamala Harris of endorsing a 25% tax on unrealized capital gains proposed by President Biden for 2025. However, these accusations were based on misinformation.
Origin of the Misinformation
Earlier this week, several crypto investors were misinformed that Kamala Harris supported a new tax on unrealized gains. Social media platforms buzzed with outrage as people reacted to misinterpreted headlines, believing that Harris wanted to tax unrealized capital gains at 25% next year.
Unrealized gains are the value an asset has gained before it is sold. For example, if you bought Bitcoin at $50,000 and it has grown more than 22% at today’s prices, those gains are not realized until you sell your Bitcoin.
This misunderstanding was fueled after Harris’ campaign team released her economic plan. They stated that, if elected, she would raise the corporate tax rate, a proposal previously put forward by the Biden administration. Many assumed that Harris’ team had officially endorsed the current administration’s entire tax policy proposal for 2025, which includes unrealized gains as part of a new minimum tax on the ultra wealthy. However, this was not the case.
The Real Story
Harris’ team did not endorse, comment on or reference the 256-page document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” which was published in March of this year.
The document does include a new minimum tax of 25% on total income (including unrealized capital gains) for people with more than $100 million in wealth. However, this was taken out of context and rumors spread across the crypto community.
Harris did reveal her proposed economic agenda, which included a series of tax proposals. She expressed support for raising the corporate income tax rate from 21% to 28%. This could impact crypto companies, especially larger entities like exchanges or mining operations.
Another part of Harris’s economic agenda is focused on making housing more affordable. She plans to offer tax breaks to companies that build affordable housing and provide up to $25,000 in down-payment support for new homeowners.
What About Biden’s Proposal?
Biden’s proposal for 2025 includes several tax policy changes aimed at increasing the tax burden on the wealthiest Americans. The proposal seeks to close the so-called “loophole” in the current system that lets wealthier individuals pass on the appreciated value of their assets to their beneficiaries without ever paying income tax on those gains.
The proposal includes a minimum income tax (25%) for the wealthiest Americans who have wealth (meaning assets minus liabilities) of over $100 million. However, less than 10,000 Americans would be affected by such a change in tax policy.
Public Reaction and Controversy
The recent debate around Vice President Harris and her rumored stance on taxing unrealized capital gains ignited a firestorm on social media. Reports suggest that Harris is aligned with the Biden administrations 2025 tax proposals, but Harris and her team have yet to endorse all of the proposed changes officially.
A January 2024 analysis revealed that U.S. billionaires and centi-millionaires held a staggering $8.5 trillion in unrealized capital gains in 2022. This could be a potential goldmine for federal revenue, but it has also sparked intense debate.
Douglas A. Boneparth, a certified financial planner and CNBC advisor council member, called the idea of taxing unrealized gains “dumb.” Aaron Levie, CEO of Box, shares the same belief, stating that “unrealized gains are simply a field in a database and not useful until converted into something of value.”
According to Polymarket, while Harris was once leading the race with strong odds of winning the election, her chances have recently dipped to 46%. Meanwhile, Trump, who was slightly behind, has retaken the front seat with odds now at 53%.
When it comes to tax policy, the devil is in the details. And if social media has taught us anything, it’s that even the smallest detail can cause a big stir.
