Overview:
Entrepreneur Vivek Ramaswamy expressed strong concerns over Vice President Kamala Harris’ tax proposal on unrealized capital gains, warning that it could trigger a severe economic downturn reminiscent of the Great Depression. Speaking at a Trump campaign event, Ramaswamy detailed how this tax could result in a forced sell-off of assets, creating a domino effect in asset price declines and harming less-wealthy investors.
Why It Matters:
Taxing unrealized capital gains could destabilize the economy by forcing Americans to sell assets prematurely, which would lead to a devaluation of investments and hurt everyday citizens.
Who It Impacts:
This policy would disproportionately impact small business owners, middle-class investors, and individuals who lack significant liquid assets to cover these unexpected taxes.
At a recent Trump campaign event, entrepreneur and former Republican presidential candidate Vivek Ramaswamy issued a stark warning about Vice President Kamala Harris’ endorsement of a tax on unrealized capital gains. Ramaswamy, who has gained a reputation for his sharp economic insights, cautioned that such a tax could plunge the country into another Great Depression by sparking a massive devaluation of assets, particularly harming those without access to liquid funds.
Harris has publicly supported the concept of taxing unrealized capital gains, which would force Americans to pay taxes on the increased value of their assets—like stocks, real estate, or businesses—even if they haven’t sold the assets or realized any profit. Ramaswamy argued that this approach could trigger a “downward spiral in asset prices” as investors would be forced to sell assets prematurely just to cover the taxes.
According to Ramaswamy, the consequences of such a policy would not be isolated. “You don’t want to sell, but you’re forced to sell because you have to pay the tax out of pocket. But it turns out you won’t be the only person required to do that,” he explained. As multiple investors begin selling assets, the price of those assets would fall, creating a ripple effect that could decimate the value of investments across the board. This, Ramaswamy warned, could mirror the economic collapse of the Great Depression.
He also pointed out that the people most vulnerable to this policy would be small investors and entrepreneurs who have tied up much of their money in their businesses rather than liquid assets. “The reality is, you know who’s gonna be holding the bag at the end of it? The people who don’t hold liquid assets,” Ramaswamy said, emphasizing that wealthier investors typically keep a portion of their assets in liquid holdings and are better equipped to weather such taxes.
Using the example of a small business owner, Ramaswamy highlighted the danger this policy poses to entrepreneurs who are in the early stages of success but need to reinvest in their ventures. Without enough liquid cash on hand, they would be forced to sell parts of their business just to cover the tax burden. “Think about that entrepreneur who started a small business, a barbershop, a restaurant owner who might be having early success but needs to reinvest in their business to grow it. They don’t have the cash to pay it because they’re all in on their business,” he said.
Beyond the immediate economic impact, Ramaswamy linked Harris’ tax plan to the broader policies of the Biden administration, which he claimed have significantly increased regulatory costs for Americans. Citing one estimate, he noted that Biden’s policies have added $47,000 in regulatory costs per person over a lifetime, a burden that would only grow under Harris’ proposed tax schemes.
Ramaswamy also suggested that Harris’ economic philosophy mirrors the far-left policies of Democratic figures like Bernie Sanders and Elizabeth Warren. However, he expressed more respect for Sanders and Warren, who at least stand by their convictions, as opposed to Harris, whom he characterized as lacking genuine beliefs. “The only thing worse than somebody who believes the wrong thing is somebody who advances the wrong policies while actually believing nothing at all,” Ramaswamy said, accusing Harris of adopting policies without a clear ideological foundation.
The potential consequences of Harris’ tax proposal go beyond mere financial inconvenience; they threaten the stability of the entire economy. By targeting unrealized gains, this tax would force asset holders to make decisions based on fear of taxation rather than sound investment strategies, resulting in a destabilized market and disproportionately harming middle-class Americans and small business owners. For many, this policy represents yet another overreach that places more burdens on those striving to build a secure financial future.
