Stop Pulling the Wagon

Vice President and Presidential candidate Kamala Harris

Listening to Kamala Harris, I remember at one point during one of her “word salad” explanations that one “New Tax Plan” she wanted to put in place is to start taxing and collecting taxes on “Unrealized Capital Gains”.   I am sure that if she had been asked to explain just how she would do this that we would have gotten a five minute “remembrance” of how she grew up in a middle class family, how hard her mother worked and how much she loved math, how she was the tallest kid in the third grade and all that she learned about adding and subtracting and how she loved her third grade teacher.

Like most “Progressives” (aka – Socialists) she believes that the government knows better how to spend the money you work so hard for than you do.  You are incompetent, you need people like her to take care of you.  Kamala also believes that if you have lived and worked here all of your life, paid taxes and been a good citizen, you should pay for your health insurance. (Even Medicare recipients pay a premium.)  But, if you are here illegally you should receive “free” healthcare.

I am also sure she has no clue as to how a “Unrealized Capital Gains Tax” plan works or the impact it would have on the economy. An explanation from an economist along with the implications of such a plan would sound like “word salad” to her.

Under current Tax Law, Capital Gains are taxed when you sell an asset and they become “realized gains” (money in hand).  Under her “vision” it would be taxed as it is earned but “unrealized” (not cashed out – “paper profits no money in hand”).

Here is a real simple example of how Kamala’s  plan could affect the average “Joe Sixpack” tax payer.  Joe buys a house for $100,000 dollars.  Two years later “Zillow”, “Google” or some other agency that tracks home values reports that Joe’s home is now worth $150,000.  Joe has a $50,000 “Unrealized Capital Gain” (profit on paper).  Under Kamala’s plan the IRS would send Joe a “Capital Gains” tax bill for taxes on his $50,000 “gain”.  And as the home continues to gain in value, our Joe would continue to get supplemental “Capital Gains” bills for taxes due.  Not to worry though, if Joe can’t pay the additional income taxes being levied, the IRS will just place a lien (plus interest) on the property until it is sold.  The IRS is so helpful that way.  

As an added bonus you can expect your State, County, even Local Government Tax Authorities to figure ways to get their share of this Tax Bonanza.  I live in California and can envision our Governor Newsom already getting “hot flashes” at the prospect of getting his hands on your “Unrealized Capital Gains” long before you do.

What if our Joe’s home value actually goes down in value.  Under some circumstance the IRS “might” let you write off some of the loss (good luck).  

This same scenario applies to other investments and assets as well.  Your 401K account, Stock Portfolios, Land, “Investment Grade” most anything.  Putting your money away in gold or silver into an account the government can monitor?  

Below is the Google / Dictionary Definition of “Unrealized Capital Gains”

“Unrealized capital gain refers to the increase in value of an investment or an asset that an investor holds but has not yet sold. These gains are “unrealized” because they exist only on paper; they only become “realized” once the asset is sold.”

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Today,  the government taxes you on everything you earn and they tax you on what’s left of what you worked for when you spend it. They tax everything at every level.  And they tax you when you die.  Oh, and Kamala also mentioned she would like to increase estate taxes which would include family farms etc. etc. etc. 

Do you really want to have the government tax “Unrealized Capital Gains” as outlined above and as viewed by the wolves at the IRS?

Bob Bandy – September 2024