Vivek Ramaswamy: Kamala’s Proposed Tax Raises Could Trigger ‘A Second Great Depression’

Entrepreneur Vivek Ramaswamy warned on Thursday that Vice President Kamala Harris’ tax proposals risk another Great Depression if enacted.

Ramaswamy spoke at a Trump campaign event and said that a tax leveraged on unrealized capital gains could cause a “downward spiral in asset prices” and lead to a depression economy. Harris has endorsed a tax on unrealized capital gains, along with other tax proposals, included in the latest Biden-Harris administration budget proposal to Congress.

A tax on unrealized capital gains would force Americans who hold assets such as stocks, real estate, businesses, and other property to pay a tax if the assets increase in value. A tax on unrealized gains must be paid on the appreciation of the asset regardless of whether it is sold and an actual profit earned.

Ramaswamy said that such a tax could force investors and property owners to sell assets early and trigger a collapse in asset prices.

“You don’t want to sell, but you’re forced to sell because you have to pay the tax out of pocket. But it turns out you won’t be the only person required to do that. Somebody else will be required to do that, too, but they’ll have to do it at a lower price because you already sold, and your sale drove down the price of the asset,” Ramaswamy said.

“And then when the next person does it, that triggers down the price of the asset further. But the guy sitting next to him has to sell that asset to pay his taxes. That is how you trigger what you call a downward spiral in asset prices. It’s the best formula for triggering a second Great Depression, if we ever have one,” he continued.

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The former Republican presidential candidate said that the people most likely to be damaged by such a collapse in asset prices are less-wealthy investors who do not possess enough liquid assets, such as cash, to pay the taxes on their unrealized capital gains.

“The reality is, you know who’s gonna be holding the bag at the end of it? The people who don’t hold liquid assets,” Ramaswamy said. “Most people who are wealthier [are] well-advised enough to know that they [need to] hold a significant portion of their assets in liquid holdings.”

“But think about that entrepreneur who started a small business, a barbershop, a restaurant owner who might be having early success but needs to reinvest in their business to grow it. They don’t have the cash to pay it because they’re all in on their business. They’re the ones who are ultimately going to actually have to pay the price,” he said.

The entrepreneur and venture capitalist suggested that Harris’ economic plans would be a continuation of President Joe Biden’s agenda – an agenda that has saddled the average American with an extra $47,000 in regulatory costs over the course of a lifetime, according to one estimate. Ramaswamy said Harris’ policies are borrowed from Democratic hardliners such as Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts.

“I respect the likes of Elizabeth Warren and Bernie Sanders more than I respect Kamala Harris,” Ramaswamy added. “The only thing worse than somebody who believes the wrong thing is somebody who advances the wrong policies while actually believing nothing at all. And I think that’s what we’re getting with Kamala Harris today.”

.@VivekGRamaswamy lays out exactly how Kamala Harris' capital gains tax would trigger the next Great Depression. pic.twitter.com/WEXrvCucnh

— Daily Wire (@realDailyWire) August 22, 2024