In April of this year, President Biden -- then still the presumptive Democratic candidate for 2024 -- proposed a capital gains tax of 44.6%, including a 25% 'unrealized' capital gains tax on people making over $100 million dollars. At the time, I said it would wreck the economy.
And it would.
It's a policy Kamala Harris intends to enact should she be elected into office.
Kamala Harris doesn’t support a tax on unrealized gains of you or anyone you know.
— Abundantly Erica - Stock Options + Investing (@womenoptionswin) August 21, 2024
Some misinformation finance accounts are posting she is in favor of taxing unrealized cap gains.
This is the actual policy she supports : “Her proposed 25% tax on unrealized gains for…
But don't worry, they reassure us: it's only for 'high-net-worth' individuals. Right now, that's anyone worth $100 million or more.
Absent winning the lottery, it's a tax bracket I will never see.
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Confederate General Robert E. Lee once said 'It is history that teaches us to hope', and it is history that also teaches us. So indulge me for a moment with a little history.
The first income tax was enacted by Abraham Lincoln in 1862 to offset the cost of the Civil War. That tax levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000. In 1867, that tax was lowered and most revenue came from the sales of alcohol and tobacco. The income tax was repealed in 1872.
In 1913, Congress ratified the 16th Amendment, giving them 'the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.' Congress then enacted a 1% tax on personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000.
While the IRS says the average income in 1913 was $3,900 -- my research showed the average hourly wage for production workers was $0.20 an hour, or $416 per year (working 40 hours per week). Professionals such as accountants or mechanical engineers earned more. But most Americans earned far less than the $3,000 income threshold laid out by the IRS.
Today, if you're a single payer and you earn more than $11,001 your tax rate is 12%. The federal poverty level for a single person on 2024 is $15,060, in case you were wondering.
My point is this: today Kamala and her supporters tell you that her capital gains tax plan only applies to the ultra rich, and will never impact you. History shows us that is a lie.
What started out as an income tax of a small percentage of high earners in 1913 now applies to the majority of Americans.
And all those centi-millionaries? Well, here's what they'll do if this policy becomes law:
Multi-billionaire here (no, really).
— BonkDaCarnivore (@BonkDaCarnivore) August 21, 2024
It absolutely affects everyone.
For one, there's the obvious long-game that eventually "high net worth" becomes "everybody". They just start off at the top because that's where the least resistance from the masses is.
But let's look at…
The entire post reads:
But let's look at this further (since Dems can never figure out the unintended consequences): If you're going to tax me 25% on gains I haven't even realized yet (but offer me no way to write off losses without special dispensation or to claw back those taxes if the gains become losses), and 45% on realized gains...why the hell would I continue to put as much of my capital into the markets vs. tax sheltered investments, foreign investments, straight cash, etc? I wouldn't.
So TRILLIONS in capital will flee the markets all at once, causing a massive downtrend in the markets - obliterating your little Roth IRA in the process. Every calculation for investments will have to be re-factored; a process that will take years. In the meantime, you're on the bread lines and I'm sitting on a pile of cash.
Didn't affect me. DID affect you.
Kamala's policy will take vast amounts of wealth out of the economy. The centi-millionaires will essentially vanish by removing their money from the markets.
What do you think the Democrats would do then? Give up the plan? Restore sane tax rates?
Nah.
They'll do the same thing they did after they enacted the income tax in 1913: continue expanding the law, lowering the definition of wealth and taking taxes from people like you and me. Including taxes on 'unrealized gains' which will impact our retirement accounts, our stock portfolios, and even our houses.
Most Americans cannot afford that. It will bankrupt us, force us to sell off our homes and cash out our investments.
So don't kid yourself: this isn't a tax that'll only impact the ultra-wealthy.
It will impact all of us. Badly.
