Democratic presidential candidate Kamala Harris is widely expected to continue the policies of President Joe Biden’s administration, where she has played a key role. At the Democratic National Convention that is being held in Chicago, Harris outlined her stance on taxation and it did not go down well with most on Wall Street.
Harris’ Tax Proposals: The vice president said she would endorse Biden’s proposal to raise the federal corporate tax rate from the current 21% to 28%. Incidentally, her opponent in the presidential race, Donald Trump, has pledged to lower the tax to 15%.
The higher revenue anticipated from the tax rate hike is expected to fund some of the economic proposals including a $6,000 tax credit for parents of newborns and the reinstatement of the pandemic-era expanded Child Tax Credit.
This apart, Harris also supports an annual 25% minimum tax on the unrealized gains of individuals with income and assets that exceed $100 million.
See Also: Trump Vs. Harris: Switching Biden For Kamala Harris Averted Democrats’ Potential 6-Point Deficit In New Poll – Will It Propel Her To White House?
Harris Faces Backlash: Fund Strat Head Of Research Tom Lee, one of the bullish strategists on Street, said, “This is a very unstable tax policy.” “Would be opposite of creating incentives to be long-term oriented,” he said.
His view was in response to conservative political commentator Joey Mannarino’s X post in which he said the unrealized capital gains tax that is being mooted by the Democratic camp is “insanity.”
“She cannot win. There will be no country left,” he said.
To make his case, he said it will be like buying a Bitcoin BTC/USD for $50,000 and if it appreciates in value to $70,000, you will have to pay a tax on the $20,000 capital appreciation even if you don’t sell the crypto.
New Street Research’s Pierre Ferragu went a step further and ran a poll on the proposal. “A tax on unrealized gains is IMPOSSIBLE to implement. A candidate just proposed it,” he said.
Ferragu gave two reasonings for such a move – “Said candidate too dumb to understand this” or “Said candidate (and party) considering their voters too dumb to understand this.” He used these as the two potential responses for the poll question.
The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the performance of the broader S&P 500 Index, rose 0.17% to $559.65 in premarket trading on Wednesday, according to Benzinga Pro data.
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