I want to be very clear: I am NOT endorsing or opposing any politician or candidate. But this is an incredibly important topic and I am hoping that I can break it down fairly and dispassionately. I am also going to try my best to keep my personal views out of it. I look forward to hearing your thoughts, comments, corrections and questions. Here goes… Year Of The Opposite - Travis Stoliker's Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. In plain English, what exactly is going on and why is the concept of taxing unrealized capital gains in the news? The concept of taxing unrealized capital gains has become a hot topic, especially as the Biden-Harris administration pushes forward their unique tax policies. In essence, unrealized capital gains are the increases in value of assets like stocks or property that haven't been sold yet. Under a new proposal, the idea is to tax these paper profits annually as if they were actual income. This topic is making headlines because it's a major shift in how we think about wealth and taxation. Traditionally, taxes are levied on income you actually receive—like your salary—or on profits you make when you sell an asset. (Note: When I say “Asset” just think: your real estate, your stock, or maybe a business you own that you sell.) But now, the discussion has pivoted to taxing potential income before it’s even realized. (Note: When I say “realized” in a financial concept it means selling an asset like a stock and converting the stock certificate into cash.) The stated goal behind this new and novel approach is supposed to ensure that the wealthiest individuals pay a fair share, addressing concerns over wealth inequality. However, as with any significant policy shift, it brings along a flurry of debates and concerns.The Biden-Harris administration has said: "Preferential treatment for unrealized gains disproportionately benefits high-wealth taxpayers and provides many high-wealth taxpayers with a lower effective tax rate than many low- and middle-income taxpayers." What has been proposed and what is the history of the proposal to tax unrealized capital gains? The proposal isn't just a fleeting idea; it’s embedded in the Biden administration’s fiscal plans. Officially introduced in March 2023, the proposal suggests a minimum tax of 25% on total income, including unrealized gains, for those with a net worth exceeding $100 million. This isn't a new debate, though. The concept of taxing wealth rather than just income has been discussed for years, but it’s only now being seriously considered as a part of fiscal policy. The reason this is coming up this week is that the Committee for a Responsible Federal Budget reported on the Harris campaign's stance. They stated: 'The campaign specifically told us that they support all of the tax increases on the high earners and corporations that are in the Biden budget." Here is the full policy and some important excerpts: But doesn't this policy only apply to super rich people? Yes, but the concern is that this is exactly how the income tax originally started. The idea of taxing only the super-rich isn't new; it mirrors the initial U.S. income tax in 1861, which taxed just 3% of the population making over $800. However, this tax was temporary, repealed in 1872, but its concept evolved, leading to the 16th Amendment in 1913, allowing for a broader income tax. Critics worry that what starts as a tax on the ultra-wealthy could expand, much like the income tax did. Initially targeting the rich, the income tax eventually reached the middle class, with rates as high as 94% for top earners by 1944, showing how tax policies can broaden over time. Even though this policy doesn't yet apply to everyday people, can you give me an example that a common person can relate to? Sure, imagine you own a house. Over the years, the value of your house increases significant