[Music] hello everyone thank you for joining me if you thought that paying taxes on the money that you earned is unfair how would you like the government to require that you cut them a check on the profits that you have not even earned well reportedly camela Harris is proposing to tax your unrealized gains in this video let's discuss what this proposal actually entails for individual taxpayers for investors and for the United States economy despite the fact that very little is known at this time about CA Harris domestic and foreign policy plans we're just two months away but we know very little her economic advisor Barat Rama said in an interview on CNBC and I posted a short clip of that on my Telegram and on my ex he said that there is no difference between property taxes and taxes on unrealized gains adding that taxing your unrealized gains is how camela Harris plans to fund the quote opportunity economy the term that she's been using quite frequently in her campaign so first of all let me put my CPA head on and quickly explain what unrealized gains actually are so that we're on the same page an unrealized gain or alternatively and unrealized loss is the change in value of an investment such as stock or Bond Bond or any other asset such as your residence for example the change in value of an asset that you have purchased but not yet sold it is the change in value the difference between the price that you paid for it and what the market is willing to pay for it at any given moment in time it's effectively a paper gain or a paper loss it is not considered to be income for tax purposes or for any other purposes in finance or accounting and this is because it is not real it just doesn't exist and given the volatility of the market your unrealized gain today may actually turn into an unrealized loss Tomorrow there's nothing to tax unrealized capital gains are not a component of any measures of income that are currently used by various federal agencies as well as private businesses therefore the gain or loss is only taxed once it is realized meaning when you sell the asset additionally even at that point in time when you choose to sell that asset and realize your gain you are able to take tax credits or tax deductions to actually reduce the taxes that you owe on that profit now this is the end of August we are two months away from the elections Harris does not appear to have a clear tax strategy a clear tax plan however her staff says that she supports the last budget proposal under Joe Biden which did include new taxes on unrealized capital gains taxing unrealized gains is taxing people on money that they do not have the United States tax system does not Levy taxes on unrealized profits neither on the individual level nor on the commercial level taxing unrealized gains raises effective tax rates the tax rates that you actually pay by making you effectively prepay your taxes on gains that you have not even realized yet implementing such a tax would be extremely harmful to the economy it would not only discourage Investments which in turn of course would result in slower economic activity and ultimately slower economic growth but also it would encourage investors to move their money overseas seeking beneficial tax Havens also when we hear excuses such as well this tax won't apply to those making let's say less than $400,000 we should look at a bigger picture here supporting the tax on unrealized gains for any income level in this particular case it is high earners but it is a slippery slope there is no guarantee that the threshold won't be lowered one or two years down on the road and won't ultimately include you even if you're far below that high income earner category after all the debate over taxes on unrealized gains this is not so much about taxes as such it is a debate about what constitutes income and once that is redefined similarly to how the definition and the formula that measures recession was uh recently changed as you know so once that's adjusted all options will be on the table to that end the tax on unrealized gains is the very tip of a much bigger actually $5 trillion tax plan Harris campaign recently confirmed that she does support nearly $5 trillion dollar in tax increases that are included in Biden's 2025 budget proposal combined this is a variet iy of tax increases that apply to different Industries and to different groups of the population and this represents the largest tax increase in four decades in 40 years they include higher death or estate tax lower limits on your retirement contribution less favorable treatment of business losses for certain businesses which would of course make them pay more in taxes but let's take a look at at the top three items that would likely apply to the majority of my viewers first it is a 28% Federal corporate tax rate that may sound great on paper however when corporations pay higher taxes they increase their prices so we consumers end up absorbing an increase in their expenses tax is a business expense to corporations and they are not going to allow it to cut into their profits so shareholders will either decrease production increase prices they may choose to lay people off they will do anything to maintain the profit margin that they want for as long as they can second the budget proposal supports 44.6% capital gains tax and dividend tax rate as I just said it's the end consumer that will end up paying for the increase in taxes third the budget proposal seeks to Levy higher taxes on the production of oil gas and coal this increase intentionally and deliberately I really want to emphasize this it intentionally targets the US fossil fuel industry as a whole so not only are they subsidizing sustainable energy industry which I'm not against it we should do it by all means but we should do it wisely but also they're now hitting traditional energy infrastructure with harsh tax rules in this specific case the new tax is estimated to bring in for the government additional $97 billion in taxes over the next decade from fossil fuel producers who will cover the biggest portion of those $97 billion you guessed it right it will be you you and I people like us let me know what you think about these tax increases I would love to to hear from you perhaps you agree with some of them but disagree with others comment below and let me know thank you so much for your time thanks for watching consider joining my community on locals and on patreon I appreciate your support like subscribe and share and I will see you back here tomorrow take care