Fact Check: Presidential Candidates Propose Tax on Unrealized Capital Gains

ST. PAUL, Minnesota (FOX 9) – Taxes are a hot topic in the presidential campaign, but if you get your information from social media, chances are it’s misleading.

What we know

Taxing unrealized capital gains is currently the big talk of the town.

That would be a tax on the rising value of the things you own, like real estate, but before you sell them and make a profit.

Social media posts are sounding the alarm over Kamala Harris’ plans to raise taxes on unrealized capital gains.

Most of these statements have the same theme: “If the value of your house increases, you should pay that tax.”

But for 99.9972% of Americans, this simply doesn’t apply.

“It’s only for people who currently have assets over $100 million,” said Dr. Christopher Phelan, an economics professor at the University of Minnesota.

Phelan’s “for now” could be important.

The vice president has not yet presented a tax plan, but her campaign team says she supports President Biden’s proposal.

It would include the first-ever tax on unrealized capital gains, but only for the super-rich.

According to Phelan, there is a potential slippery slope.

“It has to be, because there just isn’t that much,” he said. “Even though these guys are fantastically wealthy, there aren’t that many of them.”

There are less than 10,000 of them.

Different plans

During campaign rallies, Vice President and Governor Tim Walz often focus on lowering the cost of living, particularly at the grocery store and when buying a home.

“The voters who really qualify are the ones who have felt the pressure of inflation and the economy,” said Mark Penn, a former Clinton adviser. “That’s why Harris is going to tackle the economy as quickly as possible.”

An analysis of competing budget proposals by Penn Wharton found that Trump would increase the federal deficit by $5.8 trillion over the next decade, while Harris would add $1.2 trillion.

His plan focuses on tax cuts, especially for high-income earners and corporations.

Her proposal is to offer tax cuts to low-income parents and workers.

He would generate some revenue through tariffs.

She would supplement this with heavier tax burdens on the wealthy and corporations, which Phelan says could backfire.

“If our corporate tax rate is not in line with other countries, then Medtronic has moved to Ireland,” he said.

There is at least one point they agree on: Both candidates have proposed some version of no tip tax at all, but Phelan agrees with most economists on that and says it makes absolutely no sense.