Tom Woods,

You may have heard that Biden and Harris want to tax “unrealized capital gains.” You may not know what that means, but you (rightly) suspect it’s a terrible idea. Here’s what it means (mathematical example shared with me by a friend): (1) January 2020, you buy 100 shares of Zoom stock at $75 per share. (2) That stock ends the year at $350, which means you made a gain of $27,500. But it’s an unrealized gain, because you didn’t sell the stock. You still have it. (3) Kamala would tax you 75% on that $27,500 that you don’t actually have. (4) Since you don’t have the cash to pay it (you never sold the stock, remember, so you never actually experienced this “gain”), you withdraw from your savings. (5) You hold the stock until August 2024, when it’s only $60 a share. (6) You decide to sell because this is the most you think you’ll ever get for the stock. You sell at a loss (remember, you bought it at $75) at $60. (7) Oh, and those taxes on your “unrealized capital gain”? Well, you ended up with a loss, not a gain, but Kamala keeps your money anyway. By the way, when we post on this topic Facebook directs us to a “fact check” that says, “The Harris campaign did endorse a plan that would tax unrealized capital gains, but it would apply only to a subset of high-net-worth Americans worth $100 million or more.” This is exactly what they told us about the income tax over 100 years ago: only the super rich will pay it. But even if this new tax did stay confined to the super rich and never expanded over time, we are nevertheless all affected by it, and not just people at the top of the income scale. As a wealthy fellow on Twitter put it, nobody is going to keep putting his money in the markets, as opposed to tax-sheltered investments, straight-up cash, etc., if he’s going to be taxed 25% on gains he never realizes, and when there’s no way to claw those taxes back if (as in the example above) those gains become losses. What’s going to happen to the little guy’s Roth IRA, he says, when trillions in capital flee the markets simultaneously? He’ll still be fine, because he’s sitting on a pile of cash. But the envious losers who cheered on this tax because they thought it wouldn’t affect them will be the ones in the bread lines.