Editor’s note: This is a lightly edited transcript of the accompanying video by Professor Peter St. Onge.
Kamala Harris’ economic plan is taking shape and starts with five trillion dollars in new taxes – because Washington clearly lacks money to spend.
In the last two weeks alone, Harris has promised to raise taxes on small businesses to 39.6% and taxes on capital gains and dividends to a top rate of 44.6% – the highest rate in history, surpassing even communist President Jimmy Carter.
Since taxing half of savings isn’t even close to enough to feed Washington, she also wants to raise the corporate tax rate by a third, to 28%. That would turn us from one of the best places in the world to do business into one of the worst. We’d be worse than China, Canada, Britain, Russia, and even the European Union.
A company would literally make money by moving to Canada. And for so-called strategic sectors, our tax rate would be twice as high as in China.
Note that it is workers who actually pay corporation tax. A study by the Tax Foundation found that they pay around 70% of it in the form of lower wages. The rest is paid by shareholders in the form of lower pension yields and by customers in the form of higher prices. Yes, the same high prices that it blames on “price gouging.”
The fun doesn’t stop here.
Harris is also calling for a second estate tax, called a “step-up basis,” that would treat death as a taxable event. So not only would the family business or farm have to pay estate tax when it is passed on, but it would also be taxed as if all assets had been sold, with up to 44.6 percent going to the state in addition to the estate tax.
And finally, most importantly, Harris’s advisers are pushing for something we’ve never taxed in this country: unrealized gains. A bureaucrat will pretend you’ve sold all your stock and the family farm when you haven’t, and send you a bill anyway.
Like all new taxes, this one is being presented as if it will only affect the rich, but in reality it will affect family businesses and farms. Also, I mentioned in a recent video that the income tax itself initially only affected the top 1%, with a top rate of 7% – and yet today we have more tax revenue than there are people in this country, and a top rate of – if Harris gets her way – 44.6%.
Moreover, Americans reject the taxation of unrealized profits by an overwhelming majority of three to one. 76 percent of independents are against it.
It’s also worth noting that Europeans have tried this type of wealth tax over and over again and failed every time. The really rich just move their money around and hire better tax lawyers while small businesses are ruined. Norway, for example, expected to raise $150 million annually from its wealth tax, but instead $54 billion has fled the country and $600 million in taxes have flown out with it.
And what happens next?
Barely a month after Harris’s presidential candidacy, she is already far to the left of President Joe Biden. And remember, this is before the choice when trying not to sound crazy.
We can only guess what is coming after the choice.
Like drinking coolant in your car’s engine coolant, government spending always tastes sweet at first. The stimulus checks, the trillions of dollars for green energy, and this week’s war are all painless blips on a debt graph.
Then comes the regret: first inflation, then taxes that amount to a total confiscation of your pension and the financial future of young people – all while simultaneously gutting what is left of the productive economy.
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