Kamala Harris' 25% unrealized gain tax plan (the good, the bad and the truth)

let's get political it is official Camala Harris has accepted the Democratic party Presidential nominee for 2024 and by cementing her campaign she has also shared some of her economic plans today I will be talking about perhaps the most controversial of them all a 25% tax unrealized gains let's get to it my goal with this video and my additional videos on the economic policies of the 2024 election is not to discredit or praise the policies my goal is to do research and to try to explain the economic ideas that are a little more complex so you can make a better decision it is also important to say that I cannot vote even though I live in the US and have been living here for 10 years now I am not a US citizen so I am not eligible to vote this makes me a little more unbiased so let's get to what is in my opinion the most controversial economic policy that CA has proposed the 25% tax on realize gains to the date that I am making this video Kamala has not publicly spoken about this policy yet if you go to kamala's website she actually does not even have a detailed agenda of her economic plan or any plan of her presidential bid so why are people saying that she wants to tax 25% of unrealized gains if she hasn't mentioned it yet well because she did endorse the idea every year the administration of a president releases a document called the green book which is a do document issued by the Department of Treasury that provides a detailed explanation of the revenue proposals included in the president's budget Biden's Treasury Department released this back in March a 250 page document with dozens of ideas and kamala's campaign has since then endorsed this document and its policies so even though she hasn't publicly expanded on it it will be something she intends to implement as precedent so let's get deep into it the first item to point out is that this would only be applicable to those that have a net worth above 100 million that is their assets minus their liabilities are above 100 million that to start should discredit most of the videos pictures and articles you've seen online because this is a huge fact about the law that has often been left out the percentage of us taxpayers that would have to pay this tax is less than .1% and even though I am confident in the views of the channel I would dare to say that it is not anyone watching this video but it is still something to consider in your decision of a presidential candidate so let's dig a Little Deeper the regulation is not actually centered in the 25% tax on unrealized gains it is actually centered on a point titled impose a minimum income tax on the wealthiest taxpayers the implications of this law do not revolve primarily under unrealized gains it revolves under a tax policy that Democrats have been implying for years which is to make a minimum tax tax percentage for wealthy individuals per the normal tax bracket that we all use individuals making above around $600,000 have to pay around 35% in taxes however due to many legal loopholes such as taking losses people can avoid these taxes and pay virtually zero an example of that is Trump paying $750 in taxes in 2020 and by the way I'm just using Trump as an example because he is a wealthy individuals that has taxes that are public not because anything else the goal of this policy is that if you have a net worth above a 100 million you have to pay at least 25% in taxes on ordinary income additionally here they've also added the idea of paying 25% in any unrealized gains so let's look at an example you buy a stock at $100 the stock goes crazy and now it's worth $200 under this law you will have to pay $25 in taxes give or take the first year so after the first year the stock it's still worth $200 but now it has a cost basis of $125 if you sell that stock in year two the taxes you already paid are factor into the realized gain you take after this is one of the focuses of the bill it looks to not double tax but rather tax in advance but if we make another scenario where the stock decreases to below $100 and you sell you would actually get a refund for paying taxes in advance of something that became a loss well this policy would only affect a very small percentage of the US population it is one of the policies that can contribute a big chunk into the tax revenues of the United States you see what very wealthy individuals usually do is that when they have an investment with very big unrealized gains they tend to pledge those assets as collat rules and take out a loan against them this debt that is taken out is tax-free because there's no tax on something that you have to pay back this is called security backed lending a lot of time this debt is never actually paid back in order to avoid the huge unrealized gains rather the person paying back the debt just pays a small interest during their entire life until they pass away once a person dies their estate can get a step up in cost basis this means that the cost bases of the assets become the price of the assets on the date of the death of the person so it's only then when the state actually sells the assets paying little to no capital gains and uses that virtually tax-free money to pay back the debt and that's one of the main ways that the ultra wealthy avoid paying taxes legally politicians primarily Democrats are aware of this tax loophole and with policies like this one they attempt to close the loopholes and increase tax revenue the question is is it the best best thing to do well that's actually for you to decide while I don't think this would dramatically affect Investments and financial markets like many news platforms are quick to point out it does create the opportunity of a slippery slope as star in taxes and unrealized gains while only above 100 million could have made the idea of aack on unrealized gains on everyone a big possibility but this policy is also projected to raise $500 billion in 10 years that's $500 billion for new schools Parks hospitals and even lowering the national deficit nonetheless this is not the most important tax policy that Cala is running on she actually hasn't even spoken about it since she endorsed it so over the next few weeks and months I'll be digging a little deeper into both kamala's and Trump's proposed economic policies to show you the good the bad the ugly but most important the truth thank you so much for watching and I'll see you next time peace [Music]