As the Democratic National Convention approaches day three, Kamala Harris’s economic blueprint has leaked a surprise tax on unrealized gains. Many on X and subsequent crypto forums are debating whether Kamala is about to prevent anyone from making it again in crypto.
Fortunately, most traders can breathe easy, as Kamala’s new tax plan targets the ultra-wealthy. The plan details a 44.6{3da602ca2e5ba97d747a870ebcce8c95d74f6ad8c291505a4dfd45401c18df38} capital gains tax and a 25{3da602ca2e5ba97d747a870ebcce8c95d74f6ad8c291505a4dfd45401c18df38} tax on unrealized gains for Americans with a net worth over $100 million.
That means you get taxed for assets appreciating even if you don’t cash in on it.
The fear is that this will have a trickle-down effect on the entire industry, causing many crypto companies to seek refuge away from the United States.
Harris’s 2025 Tax Plan on Unrealized Gains
Originally Joe Biden’s tax plan, Harris is backing several controversial federal revenue-boosting measures.
Sources like Semafor and the Committee for a Responsible Federal Budget confirm her full-throttle support for these tax hikes.
Biden’s proposal to tax unrealized gains will tap into the wealth of JUS multimillionaires, who have an estimated $8.5 trillion in 2022. Harris also backs a corporate tax hike from 21{3da602ca2e5ba97d747a870ebcce8c95d74f6ad8c291505a4dfd45401c18df38} to 28{3da602ca2e5ba97d747a870ebcce8c95d74f6ad8c291505a4dfd45401c18df38}, echoing Biden’s call for tax equity.
The public reaction is that a capital flight is incoming, and nobody with a net worth above $100m would stay in the country.
So when there is an unrealized loss, will the federal government be paying these individuals back?
— Collin Rugg (@CollinRugg) August 20, 2024
AIER’s 2021 report shredded the tax proposal, dubbing it economic nonsense. Vance Ginn stressed that only actual income should be taxed, not phantom profits.
“Taxing unrealized capital gains on property, stocks, and other assets is not just a bad idea, it’s an economic fallacy that undermines economic growth and personal liberty,” the report stated.
To date, no European country has taxed unrealized gains, and countries such as Switzerland or Germany haven’t even taxed crypto gains.
The Political Divide: Kamala = Capital Flight?
The panic in tech and crypto circles is that Kamala Harris will win, and risk-on assets will crash.
This isn’t just an American phenomenon—Norway saw a billionaire exodus in 2022 thanks to similar tax hikes.
With the DNC concluding tomorrow and Kamala scheduled to speak, we’ll see if she has any surprises for this industry and the country.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
