A noted House Democrat who is a surrogate for Vice President Kamala Harris nevertheless ripped her economic and tax proposals as unworkable and harmful to the country.
Rep. Ro Khanna appeared on CNBC’s Squawk Box, where hosts Joe Kernen, Andrew Ross Sorkin, and Rebecca Quick voiced strong skepticism about Harris’s proposal to tax unrealized capital gains. Harris’s plan aims to impose a 25% minimum tax on unrealized capital gains for individuals with a net worth exceeding $100 million. The policy would require Americans to pay taxes on the appreciation of assets over the year.
An unrealized gain or loss is the change in value of a stock, bond, or other asset that was purchased but not yet sold. The gain or loss is “unrealized” or “on paper,” as some refer to it, because you are still holding the investment. The gain or loss is only determined or “realized” when you sell the asset, according to Bankrate. If the asset loses value over the next year, the taxes would have been paid on a valuation that no longer exists.
Khanna, who represents California’s 17th District, including Silicon Valley, expressed reservations about the Harris plan despite his support for the ticket. He argued that the policy could negatively impact entrepreneurs and create a challenging environment for startup companies.
“Let’s say you’re an entrepreneur, you create a company, it gets to $100 million or $200 million on paper. Now if you’re taxing that, you’re probably going to force that person to sell it. They’re probably going to sell it to private equity. Do you really want the entrepreneurs to be forced to sell their companies to larger institutions and to decline in value? I don’t think that’s what you want for a startup ecosystem,” he said.
“Jeff Bezos wouldn’t have to do that. They’re going after these very — I think the whole policy is demagoguing,” Kernen responded.
Khanna suggested a system that would tax individuals based on loans they take out against appreciated assets. He argued that wealthy families often use this loan strategy specifically to avoid taxes on unrealized gains.
“I get why,” Khanna said about the Harris plan. “This is not the right way to do it, and also 90, 95% of investments in startups fail and so you’re going to disincentivize investments in those startups.”
Nearly 40% of Americans are worried about being able to pay all of their bills on time, a higher percentage than during the Great Recession of 2008-09, according to a new survey.
A CNN poll revealed that 39% of Americans are concerned about consistently paying their bills, a 33% increase from the peak of Biden-flation and exceeding the 37% during the 2008 crisis, when unemployment was nearly 10%, the outlet reported, citing the polling results.
Inflation during the Biden-Harris administration has reached new heights in the modern era, and while it has eased somewhat in recent months, it remains stubbornly high, raising the costs of food, gasoline, housing, and other basic amenities like utilities. CNN added that “consumers are still trying to catch up to the price spikes of the last few years.”
The Daily Signal, citing the survey, added:
Still trying to catch up is an understatement. The gap between nominal wages and inflation-adjusted wages since 2021 is more than 20%. So, it looks like you’re making a lot more, but even accounting for official inflation, workers have lost thousands in income.
Of course, if official inflation is a lie, which seems likely, going by real-world prices from housing to restaurants and groceries, then workers have lost a lot more.
To illustrate, official inflation since COVID-19 is 21%, but fast-food menu prices—a standard finance proxy for true inflation—are up more than twice that, while housing costs have doubled since COVID-19, between rising house prices and rising mortgage rates.
If those real-world numbers are closer to true inflation, then workers have lost potentially thousands per month.
