Unrealized Gains Tax: How Harris’s Plan Could Hit Crypto Wallets

Kamala Harris, the current vice president of the United States and the Democratic candidate for the 2024 presidential election, faced criticism over her plans to tax unrealized capital gains.

CNBC’s “Squawk Box” hosts, Rebecca Quick and Joe Kernen, were vocal in their opposition, calling the proposal ‘unfair’ and ‘unconstitutional.’

Bharat Ramamurti, one of the unofficial economic advisers to the Harris’ campaign, defended the Biden-Harris plan, but the hosts remained unconvinced. Quick compared the proposal to ‘pulling forward the taxes that would be paid later when someone sells the stock.’ Ramamurti responded:

“I think that this reaction to unrealized gains is a little funny, given that I bet that the majority of people watching right now are already paying a tax on unrealized gains. It’s called a property tax.”

According to a WSJ report, Harris backs Biden’s initiative to increase taxes, which includes a 25% levy on unrealized capital gains for individuals with a net worth exceeding $100 million. Additionally, the corporate tax rate would rise from 21% to 28%. Ramamurti further explained that property taxes essentially function as a tax on unrealized gains.

The CNBC hosts argued that property taxes are more of a ‘use tax,’ primarily funding schools. However, Ramamurti countered that the revenue from taxing unrealized gains would benefit the broader U.S. economy.

It is important to note that if the Biden-Harris proposal passes, the crypto asset sector would be adversely affected; since the wallets holding Bitcoin (BTC) and other altcoins for a long time, will have to pay these higher taxes. Interestingly, the primary Republican candidate for the 2024 elections, Donald Trump, has been a firm supporter of cryptocurrencies, advocating for their widespread adoption during multiple campaign speeches.

According to Polymarkets, the chances of Trump winning the 2024 elections stands at 50% while Harris’ chances stand at 49%. This tight race has added to the drama of the upcoming election.

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