Grant Cardone Slams Biden's Tax Proposal As 'Another Attempt To Destroy Middle-Class America'

Real estate mogul Grant Cardone took aim at the Biden administration's proposed 25% tax on unrealized gains on taxpayers with wealth greater than $100 million, asking his followers on X to imagine the value of their homes or stocks increasing $400,000.

"YOU would owe $25,000 without selling," Cardone posted. "Another attempt to destroy middle-class America."

The Budget of the United States Government for fiscal 2025 proposes a new minimum tax on income and unrealized capital gains — for the small number of American centi-millionaires (more than $100 million in total wealth). There were 28,420 centi-millionaires in the world in 2023. 

Unrealized gains are an increase in the value of an asset on paper — not a gain through a sale or other event. Frank Holmes, CEO and chief investment officer of U.S. Global Investors, called the proposal "fundamentally flawed" in an article he wrote for Forbes.

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"Imagine purchasing shares in a company for $1 million and next year, those shares appreciate to $1.5 million," Holmes wrote. "Under Biden's plan, you would owe taxes on this $500,000 gain, despite not having sold the shares or realized any actual profit."

But what if the stock's value drops back to $1 million the following year and you've already paid the 25% gain?

"Now you're also left shouldering a financial burden without any actual economic benefit," Holmes wrote.

In addition to taxing increases in the value of a property that has not been sold for the highest-net-worth Americans, the tax would reduce capital available for startups and small businesses that rely on investment from individuals who will take risks with the hope of earning a return on their investment.

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"By taxing unrealized capital gains, we discourage risk-taking and stifle innovation, essential elements for improving productivity and raising living standards," Ginn Economic Consulting President Vance Ginn wrote in an article on the American Institute for Economic Research (AIER) website.

Ginn contends that taxing unrealized capital gains on property, stocks and other assets would undermine economic growth and is likely unconstitutional. However, the U.S. tax code does already allow this kind of accounting. Mark-to-market accounting aims to more accurately measure the fair value of accounts that fluctuate over time. Day traders make the election so that they can offset capital gains with capital losses. The process allows them to mark the value of the security to the new market value at the start of every year, effectively resetting gains or losses to $0.  

"Taxing unrealized capital gains contradicts the basic principles of fairness and property rights essential for a free and prosperous society," Ginn said. "Taxation, if we're going to have it on income, should be based on actual income earned, not on paper gains that may never materialize."

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