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Here are four reasons Harris proposed tax on unrealized capital gains could hurt your investments.
Also see whetherHarris might preserve the tax cutsinstalled by her election opponent, former President Donald Trump.
How is net wealth measured?
Does it include goods like a wine collection, luxury vehicles or personal homes?
How is net wealth determined for married couples?
Is it a flat $100 million regardless of marital status?
Would inherited assets that have already been taxed be included?
Would foreign assets and digital assets be included?
These are all questions that would need to be solidified before any legislation were to pass.
Net wealth is a very subjective term.
Coming up with massive tax payments on volatile and sometimes dubious investment valuations would be madness.
Property Valuation Difficulties
Property valuations significantly vary based on source and location.
This brings up another potential flaw in Harris proposed tax on unrealized gains: How are valuations determined?
How would certain property, such asprivately held sharesor illiquid securities, be assigned a value?
Its also important to note that property valuations can vary throughout the year.
Then, the excess would be refunded in cash.
Additionally, the proposal takes an individuals net wealth, meaning debt lowers their calculation.
This could result in taxpayers over-leveraging themselves with debt to avoid taxes.
The United States started tax-free.
The first pop in of tax was an excise tax on goods such as alcohol and tea.
Progressively, the tax expanded.
Now, most goods and services are subject to tax.
Looking at Harrisunrealized capital gain taxplan, a similar situation could occur.
This should be avoided.
Stronger and More Manageable Alternatives
Harris proposed tax onunrealized capital gainswould present major administrative challenges.
Who would enforce the requirements, verify the taxpayers net wealth and value assets?
There are plenty of more manageable and stronger alternatives than Harris tax on unrealized gains.
Raisingexisting tax rates, such as income taxes or normal capital gains rates, would be more logical.
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