Kamala Harris Supports a 25% Wealth Tax on Unrealized Gains
During his speech, Biden asked the audience if they knew what the average billionaire in the United States pays in taxes.
“We have a thousand billionaires in America. You know what the average tax rate they pay? 8.2%,” Biden said.
Facts First: Biden used this figure in a way that was misleading. As in previous remarks, including his State of the Union address in March, Biden didn’t explain that the figure is the product of an alternative calculation, from economists in his own administration, that factors in unrealized capital gains that are not treated as taxable income under federal law.
I've gone over all of this before. Billionaires actually pay around 24% or higher on their income. The figure Biden has repeated endlessly is made up out of whole cloth. If you count unrealized gains as income (which our tax law does not) then billionaires are only paying 8 percent.
This same lie, which has been fact checked by everyone from Politifact to the Washington Post, is also included in the Democratic Party platform document released yesterday. As you can see, the document calls for a 25% tax also presumably on unrealized gains.
There are a thousand billionaires in America, and they pay an average 8 percent in taxes– a far lower rate than a firefighter or teacher. Democrats will make billionaires pay a minimum income tax rate of 25 percent, raising $500 billion in 10 years. We’ll end the preferential treatment for capital gains for millionaires, so they pay the same rate on investment income as on wages.
This is apparently a carryover from Joe Biden's last budget which also included a 25% tax on unrealized gains. And while Harris hasn't said anything about this publicly, a recent Committee for a Responsible Budget look at her proposals included this line:
Although the Harris campaign does not specify how these proposals would be financed, the fact sheet says that Vice President Harris and Governor Tim Walz would “fulfill their commitment to fiscal responsibility, including by asking the wealthiest Americans and largest corporations to pay their fair share – steps that will allow us to make necessary investments in the middle class, while also reducing the deficit and strengthening our fiscal health.” The campaign has also communicated to us that Vice President Harris continues to support all of the revenue-raising provisions in the President’s FY 2025 budget.
In other words, the Harris campaign says it supports all of the tax increases in Biden's last budget which includes the 25% wealth tax on unrealized gains. That news was celebrated by Gabriel Zucman, a Berkeley economist who supports a wealth tax and who has been an adviser to Bernie Sanders.
The wealth tax is a truly awful idea and one which is unlikely to survive very long if tried. The Supreme Court sidestepped the issue a couple of months ago, but the writing is on the wall.
The idea of a wealth tax was not directly before the court on Thursday. Justices were considering the constitutionality of a new tax imposed under former President Donald J. Trump that applies to certain income earned by businesses overseas. But in taking the case, the court could have pre-emptively ruled federal wealth taxation unconstitutional.
It did not, and liberal groups celebrated the victory...
But the case also offered a window into the legal fight to come over various iterations of a wealth tax should Congress ever adopt one. It showed a solid four justices firmly opposed to such a tax — and two more who appeared skeptical.
This proposal is probably all just talk at this point. Still, it's worth noting that the Harris camp is still coasting on Joe Biden's lies about what billionaire's pay in taxes and his plan to hit them with a massive wealth tax. This clip is nearly two years old but still applies.
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