Harris tax proposal only for those with net worth above $100 million | Fact check
The claim: Post implies Harris plan includes tax on unrealized capital gains for everyone
An Aug. 26 post on Threads (direct link, archive link) lays out a hypothetical financial scenario, based on Vice President Kamala Harris’ reported support of a tax on unrealized capital gains.
"The Harris Walz are proposing a 25% Unrealized Capital Gains Tax," the post reads. "What does that mean? If the value of your house, increases $15,000 over the next year (sic). You now owe $3,750 in taxes."
“But we didn't sell our house?” the post continues. “You now owe $3,750 in taxes."
Some social media users took the post to mean such taxes would have to be paid by any homeowner or investor.
"And when you can't afford the new taxes, they take your house," wrote one commenter. "This is just a way to take everything from taxpayers."
Another wrote, “How is it fair to require someone to pay taxes on something that doesn’t exist? Markets can go up AND down."
The post was reposted 80 times in four days. Similar claims about proposed taxes on homes and other assets were also made on social media.
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Our rating: Missing context
The implied claim is false. The proposed tax, if enacted, would apply only to those with net worths of at least $100 million.
Proposed tax would apply only to multi-millionaires
The federal budget for fiscal year 2025 proposed by President Joe Biden lists several “revenue raisers” aimed at getting the wealthiest Americans to pay more taxes. Among them is a new tax on “unrealized capital gains,” or the increase in value of assets that have not been sold.
Social media claims about who could face those new taxes began circulating after an Aug. 16 report from the Committee for a Responsible Federal Budget said Harris’ campaign supported revenue-raising measures in the budget – which include the tax on unrealized capital gains. The Harris campaign has confirmed she backs the tax on unrealized capital gains.
The proposal would impose a minimum 25% tax on a combination of income and unrealized capital gains, according to The New York Times. But the targeted nature of the proposed tax is critical context, as it would only apply to the wealthiest Americans. The proposal is specific – it is limited to those with net worths north of $100 million, according to an explainer document from the Treasury Department. The budget proposal says that is the top 0.01% of individuals, and a recent analysis put the number of centi-millionaires in the U.S. at close to 10,000.
“This is an important proposal that would address a fundamental problem with the U.S. tax system, namely that the super-rich can get away with paying extremely little tax, when everybody else has to contribute,” said Gabriel Zucman, an economics professor at the University of California-Berkley who supports increasing taxes on wealthier Americans. He confirmed the existing proposal is structured to only apply to a few thousand taxpayers. “The proposal is squarely focused on the super-rich –Americans with more than $100 million in wealth, about 0.01% of the population.”
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Many versions of the claim on social media focus on the appreciation seen annually in the value of most homes, with some also referencing jewelry and memorabilia collections, as examples of ways people can have capital gains on paper that do not put more money into their hands.
But the tax proposal is targeted at wealthier individuals who can leave assets in portfolios and borrow against them, avoiding taxes while putting money in the bank. The maneuver is part of a strategy dubbed “Buy. Borrow, die,” referring to ways to avoid paying taxes on those assets over generations.
The Treasury Department noted in its explainer of the revenue proposals that the current system “provides many high-wealth taxpayers with a lower effective tax rate than many low- and middle-income taxpayers,” promotes financial inequality and prevents capital from circulating efficiently into new investments.
USA TODAY reached out to the Facebook users who shared the claim for comment but did not immediately receive responses.
The Dispatch and AFP also debunked the claim.
Our fact-check sources:
Kamala Harris campaign spokesperson, Aug. 27, Email exchange with USA TODAY
Gabriel Zucman, Aug. 26, Email exchange with USA TODAY
Department of Treasury, March 11, General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals
Committee for a Responsible Federal Budget, Aug. 16, The Kamala Harris Agenda to Lower Costs for American Families
USA TODAY, updated June 13, These cities have the most millionaires and billionaires in the US: See the map
Smart Asset, Sept. 12, 2023, Buy, Borrow, Die: How the Rich Avoid Taxes
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This article originally appeared on USA TODAY: Unrealized capital gains tax plan only for wealthiest | Fact check