Among the worst ideas in the Biden administration’s proposed budget is a new annual tax of at least 25% on unrealized gains for Americans with incomes and assets of over $100 million.
Taxing unrealized gains is an entirely new prospect that, if the Biden administration succeeds in doing it, would penalize individuals for owning assets that appreciate, regardless of whether those assets are sold.
But there the proposed tax is anyway in President Joe Biden’s 188-page Fiscal Year 2025 U.S. Government Budget and accompanying 256-page General Explanations of the Administration’s FY 2025 Revenue Proposals.
Such taxes are rare due to complexities in valuing these assets, liquidity concerns, and overall implementation challenges and risks. When implemented, such taxes lead to an exodus of taxpayers.
For example, when Norway initiated a similar tax in fall 2022, over…
