Vivek Ramaswamy has issued a stark warning about the economic dangers he believes would arise if Vice President Kamala Harris is elected and implements her proposed tax strategy. At the heart of his concern is Harris’ support for a tax on unrealized capital gains – a policy that Ramaswamy says could trigger economic disaster.

Under the current tax system, individuals and companies only pay taxes on the increase in value of assets such as stocks, houses or land when those assets are sold. This is logical, argues Ramaswamy, because until the asset is sold, no real gain has been made – on paper the value may be higher, but the asset owner has not seen any real money.

“Biden and Harris want to change that. For 2022, they proposed a “minimum tax of 20 percent on total income, basically including unrealized capital gains.”

However, Ramaswamy noted that the Biden-Harris administration is pushing for a change in this long-standing policy.

“Biden and Harris want to change that. For 2022, they proposed a “minimum tax of 20 percent on total income, basically including unrealized capital gains.”

For 2022, the Biden administration proposed a “minimum tax of 20 percent on total income, generally including unrealized capital gains.”

He further claimed that this number should be increased to 25% by 2023 and 2024. Although these proposals have not yet come into effect, Ramaswamy stressed that Harris’ campaign team has shown no signs of backing down on the idea.

It is important to note that Kamala has distanced herself from several policies of the Biden administration and has not indicated a stance on taxing unrealized capital gains.

“Imagine you’re a family farmer or small business owner,” Ramaswamy told his audience, “and your property increases in value due to factors outside your control – market conditions, inflation or simply the passage of time. Or think of a startup founder I know personally who came from a middle-class family and had a brilliant idea for a consumer technology company. On paper, that company is worth a lot, but all his money is tied up in the company. He has no cash to spare.”

Ramaswamy painted a vivid picture of the potential consequences: “Under Harris’ plan, the IRS won’t care that your newfound ‘wealth’ exists only on paper. They want cash. That would force people like a startup founder to sell their company shares early, just to pay a tax bill for money they never earned. The same goes for someone with long-term capital gains in their public stock portfolio – they would be forced to sell just to meet their tax obligations.”

The real danger, Ramaswamy warned, lies in the wider economic consequences of these policies. “This creates a vicious cycle of what is known in capital markets as ‘forced selling’. People would have to sell assets to pay their tax debts, and if everyone is forced to sell at the same time, it triggers a downward spiral in asset prices. That’s the perfect recipe for a politician-induced stock market crash.”

Ramaswamy also noted that even some staunch Democrats were hesitant to fully support the policy, arguing instead that it was unlikely to ever be implemented.

“It’s telling that even thoughtful Democrats don’t support this policy on purely substantive grounds, but simply insist that it never be implemented. That’s not exactly unconditional support,” he quipped.