Let’s dive into some serious economic discussions sparked by recent comments from entrepreneur Vivek Ramaswamy, who has raised concerns about Vice President Kamala Harris’s tax proposals. Speaking at a Trump campaign event, Ramaswamy warned that these proposals, particularly the idea of taxing unrealized capital gains, could lead to a catastrophic economic downturn, potentially triggering what he described as a “second Great Depression.”
Now, what exactly is this tax on unrealized capital gains that Ramaswamy is so worried about? Essentially, it’s a tax on the increase in value of assets like stocks, real estate, or businesses, even if those assets haven’t been sold yet.
So, let’s say you own a piece of property that’s gone up in value—you’d have to pay taxes on that increased value, even if you haven’t sold it or seen any actual cash from it.
Ramaswamy’s concern is that this kind of tax would force many Americans to sell their assets prematurely just to cover the tax bill. This rush to sell could create a “downward spiral” in asset prices. As more people are forced to sell, prices would drop, causing a chain reaction where more and more people have to sell at lower and lower prices. According to Ramaswamy, this could lead to a massive collapse in asset prices, which could seriously damage the economy.
.@VivekGRamaswamy lays out exactly how Kamala Harris’ capital gains tax would trigger the next Great Depression. pic.twitter.com/WEXrvCucnh
— Daily Wire (@realDailyWire) August 22, 2024
He also pointed out that the people most likely to be hurt by this would be less-wealthy investors and small business owners. These are folks who don’t have a lot of liquid assets, like cash, to pay off the tax bill without selling off their property or businesses.
Ramaswamy gave the example of a small business owner—someone running a barbershop or a restaurant—who might be doing well but needs to reinvest profits back into their business. If they have to sell their business or other assets just to pay a tax on unrealized gains, they could be hit hard, potentially even losing their business.
Ramaswamy didn’t stop there—he also argued that Harris’s tax plans are an extension of President Joe Biden’s agenda, which he claims has already burdened Americans with extra regulatory costs. He suggested that Harris’s proposals are influenced by progressive figures like Senators Bernie Sanders and Elizabeth Warren, whom he respects more than Harris because, in his view, they at least believe in their policies.
Ramaswamy took a swipe at Harris, suggesting that she’s advancing these policies without a genuine belief in them, which he sees as even more dangerous.
