Democrat presidential candidate Kamala Harris has  , confirmed her support , for$ 5 trillion in tax increases over 10 years in the , Biden-Harris administration’s proposed budget. The fact that Harris ‘ plan’s overall increase is not its worst feature should be absolutely terrifying to any taxpayer.
A significant increase in the best tax rate on capital gains is one of the numerous and varied revenue increases that Harris and running partner Tim Walz support. “]T] he ideas may increase the best marginal rate on long-term money increases and qualified payouts to 44.6 percent”, an explanation of the Biden-Harris budget says. For those with taxable earnings over$ 518, 000, the best tax rate on capital gains held for more than a year is now 20 percent. Only if the person sells the assets is the recipient of the revenue.
Capital gains taxes are not indexed for inflation, but whenever the Federal Reserve increases the money supply to protect the rapidly rising U.S. government debt, which is unavoidable under all convincing existing circumstances, the tax bite may rise sharply. True fees will be levied on fictitious increases to capital gains. The higher tax burden will make the damaged property less valuable. If you own equities, property, or other assets, the Harris-Walz taxes hike may reduce their price.
Even more unforgivably,” The Harris-endorsed resources calling for an annual 25 percent minimum tax on the unfulfilled benefits of persons with income and assets exceeding$ 100 million”, Americans for Tax Reform , information. ” Once in place, it wo n’t be long before the threshold is lowered to hit more and more Americans”.
Individuals in all income levels, not just the very wealthy, may be affected by this tax, which has a lot of potential. It may endanger the United States by causing a significant drop in private wealth.
Here’s how that will occur if the Democrats ‘ program comes to fruition. The Harris-Walz money income will reduce the value of all capital-gaining assets by imposing an inevitable, government-enforced fresh charge on them — the monthly price of the tax.
The extremely wealthy are exempt from paying taxes because reducing the investment requirement for a particular source of resources will unquestionably lower the price of those assets, which is their price. When those less valuable assets are sold to others, they will artificially reduce the price. That is wealth destruction.
The proposed wealth tax would thus decrease the values of stocks, housing and other real estate, bonds, personal property, such as automobiles, boats, some jewelry, and art works, and so on.
” That is how you trigger what you call a downward spiral in asset prices” , , said , entrepreneur and investor Vivek Ramaswamy. ” It’s the best formula for triggering the Second Great Depression, if we ever had one.
As if widespread market crashes were not bad enough, the knock-on effects could be tragic. The Harris-Walz wealth tax will destroy the retirement savings nest eggs of Generation X and the Baby Boomers by crashing the asset markets. This asset crash will have a terrible impact on the elderly because the Social Security system is already insolvent. Starvation, homelessness, and countless other ills could proliferate.
The superrich, however, will maximize their wealth by swapping out capital-gains-producing goods for other assets with lower gains and consequently less economic value. The prices of those assets will rise, of course, creating further economic distortions.
The economy will shift in favor of lower-valued resources in the long run. People will transfer their money away from the least-profitable businesses after taxes to those that cost the least.
The public benefited more from these businesses than the businesses they will sell for tax purposes, though. Investment thus moves away from highly desired, high-value-added, economically efficient activities to ones that generate less wealth — or none at all, or losses. Resources and human effort are wasted, and wealth is destroyed.
Thus, the Harris-Walz wealth tax will create enormous, ever-compounding economic distortions that move resources away from their best and most efficient uses.
On top of all that, the tax will decrease federal revenue, not increase it. Many of the wealthiest Americans may leave the country and renounce their citizenship, denying us our most economically successful citizens, who did so by boosting the output of goods and services over the previous generation.
The federal government will attempt to compel them to pay up, but it will fail. The most wealthy always find a way to defray the most financially damaging taxes. The federal government will lose the money that emigrants are currently paying in taxes. Even if Congress tries to kick the can down the road by borrowing the money, because interest payments on the debt will rise, the less-wealthy will have to pay higher taxes to make up for those losses. That will further stifle tax revenues and economic growth.
All the harm that the tax would do would not reduce the federal government’s tax revenues or punish the wealthy.
This unprecedented and undoubtedly unconstitutional tax plan would result in a number of other harmful effects. The Harris-Walz wealth tax’s entire destructive power is inescapable, despite the fact that its overall result is unmistakable: a massive economic contraction and a dreadful and unnecessary reduction in the country’s standard of living.
