harriss-taxes-unrealized-gains-only-tip-5-trillion-tax-iceberg

Vice President Kamala Harris’s campaign recently confirmed that she supports all the nearly $5 trillion in tax increases included in President Biden’s 2025 budget proposal. Among the long list of tax hikes is a novel proposal to tax the unrealized gains of wealthy Americans. As many commentators have noted, such a tax would be economically destructive, but the fervor over this one bad idea has distracted from other more wide-reaching and even more economically damaging proposals.

For example, Harris’s 28 percent federal corporate tax rate and 44.6 percent top capital gains and dividend tax rate would give the United States the highest total tax rate on corporate income in the developed world when combined with state taxes. As I recently explained, workers ultimately bear most of the cost of the corporate income tax through lower wages and fewer job opportunities. Because the corporate income tax is one of the most economically destructive ways to raise revenue, the total economic cost of Harris’ proposed tax hike will likely be multiple times larger than the tax revenue it raises.