A longstanding proposal by the administration of President Joe Biden has revived the debate over whether the government should tax inveꦉstment gains that exist only on paper.

The proposal to tax 澳洲幸运5官方开奖结果体彩网:unrealized gains has drawn fire from Repu💙blicans, who are criticizing presidential candidate and Vice President Kamala Harris for backing Biden's proposed policy. Republicans say the policy would discourage investment and slow economic growth—but some critics leave out the fact that it would apply only to people who are already extrem♒ely rich.

“Think about even everyday Americans across this country,” former Republican presidential candidate Vivek Ramaswamy said on CNBC earlier this month. “That means that if you're a farmer, or if you’re a small business owner, you will owe taxes with cash you literally do not have in your pocket to pay those taxes.” 

Who Would a Capital Gains Tax Apply to?

This is true to the extent that the wealthiest 0.01% are “everyday Americans.” The proposal, put forward as part of the administration’s 2025 budget, called for a “billionaire tax.” The 25% minimum tax would apply to the unrealized gains of people who own $100 million in assets or more—only 9,850 people in the entire country, according to an estimate by wealth advisory firm Henley & Partners. 

The prop﷽osed tax is aimed at reducing wealth inequality. Because billionaires grow their wealth not by salaries and wages but by the value of their investments rising over time, the Biden administration argues that the current tax code allows “many of the wealthiest Americans to pay lower rates on their full income than many middle-class households pay.”

What Would Change Under the Proposal?

Currently, you only have to 澳洲幸运5官方开奖结果🔴体彩网:pay taxes on your investments when you sell them, paying a rate based on how much value your assets gained when 🌸you owne🐼d them.

Critics of a wealth tax, including the Libertarian Cato Institute, argue that taxing unrealized gains would be “economically destructive.” Opponents say it could lead to odd situations such as the government having to pay the likes of Elon Musk a large tax rebate when the value of his assets goes down.

Economists have debated the pros and cons of a wealth tax, and any proposal would still have to get through Congress—something the Biden administration has been unable to do as of yet.