Kamala Harris’s campaign says she’ll support the tax increases on wealthy earners already proposed by Biden – which will likely include a 25% tax on unrealized capital gains.
Rumors are swirling online that Kamala Harris wants to introduce an unrealized capital gains tax if elected President – a move that could theoretically tear up the profits of crypto investors.
But some key details are missing from the public conversation – namely that the tax wouldn’t apply to the vast majority of investors.
Kamala Harris’s Tax Plans
As reported by Semafor on Monday, the Committee for a Responsible Federal Budget (CRFB) said that the Kamala Harris campaign has specifically promised to “support all of the tax increases on the high earners and corporations that are in the Biden budget.”
“And obviously, none of them is specifically mentioned in this [Harris] plan,” said CFRB senior vice president Marc Goldwein on the matter.
Per President Joe Biden’s 2025 budget proposal, the plan recommends a “minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains.”
Plans for this tax were echoed in the Democratic Party’s 2024 platform, which promised an income tax rate of 25 percent on billionaires, and to “end the preferential treatment for capital gains for millionaires, so they pay the same rate on investment income as on wages.” The proposal was constructed before Biden dropped out of the Presidential race, and so doesn’t necessarily reflect Harris’s exact platform.
Notably, the unrealized gains tax would only apply to the wealthiest Americans with total income or wealth exceeding $100 million. That didn’t stop crypto influencers online from panicking, warning that Harris wants a 25% tax on unrealized capital gains, and a 45% tax on long-term capital gains.
“They did not comment on introducing new taxes like the unrealized gains tax (which would be dumb),” wrote Cinneamhain Ventures partner Adam Cochran to Twitter. “So no, she did not endorse an ‘unrealized gain tax’ and even if she did, you don’t earn enough for it to impact you.”
A Dangerous Precedent
Even with the nuance, many commenters believe an unrealized gains tax of any kind can bring irreparable harm to the nation’s economy.
“When the majority of the stock market decides to sell all their shares because the US has insane tax laws around unrealized gains the little guys like you and me get absolutely fucked,” tweeted YouTuber Farzad Mesbahi.
Casa co-founder Jameson Lopp also criticized the defense that such taxes will only ever apply to the ultra-wealthy. “How do you think income tax started off?” he tweeted, referencing the introduction of the 1% income tax in 1913 that first only impacted the highest three percent of earners.