With multiple reports confirming speculation that Vice President Kamala Harris will back President Biden’s tax hike plan, reaction has started pouring in from prominent figures in political and economic circles.
"It would be devastating to the economy," former CKE Restaurants CEO Andy Puzder said on "The Evening Edit" Thursday.
"You're going to give up revenue, you're going to lose companies. We're going to lose business," he continued.
"You need to understand, a 25% increase in unrealized capital gains means, theoretically at least, if your house goes up in price, in value, the government can step in and say: give me the money," Fox News contributor and former House Speaker Newt Gingrich said during the last night of the Democratic National Convention on "Hannity."
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He then clarified that "if you don't have the money, the government can step in and say: give me the house."
Reports from The Wall Street Journal and The New York Times have said that Harris supports the tax increases put forth by Biden in his recent budget proposal. This, according to Harris’ campaign, includes a 25% tax on unrealized capital gains for individuals with more than $100 million in wealth; and an increased corporate tax rate between 21% and 28%.
Overall, the unrealized gains tax, along with the substantial capital gains tax increase, are projected to lead to nearly $800 billion in new government revenue, according to a Peter G. Peterson Foundation analysis.
But insiders like Puzder and Gingrich fear the proposals could stifle private sector and macroeconomic growth.
The policy advocacy group Americans for Tax Reform stated that the tax proposal, when paired with high state taxes, could lead to many Americans paying rates of more than 50% on income. The group also noted the proposal could crush small business owners who will be exposed to the high rate when they seek to sell their businesses.
"The last president who was a Democrat that did anything rational on taxes, again, was Bill Clinton. He cut the capital gains rate. He didn't increase it, he cut it," Puzder said. "And when he cut it, he and Newt Gingrich were able to balance the federal budget."
"The idea that we're going to tax unrealized capital gains, that's just absurd. This is voodoo economics… it’s absolutely ridiculous," the ex-CEO added.
"This would be the most crazy tax structure we have ever seen. It makes Venezuela look normal. It makes Russia look normal," Gingrich stressed. "That speech last week in Raleigh, where she outlined her economic plan, that was crazy. That was so far to the left of Bernie Sanders that Gorbachev in Russia would have thought it was a radical speech."
Harris’ tax plan announcement would also constitute a major rollback of the 2017 tax cuts, the signature domestic legislation passed during former President Trump's administration.
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"The original Trump tax cuts… not only created jobs, they created increased tax revenue, which of course came in during the Biden-Harris administration. [But] they didn't spend it to reduce the deficit," Puzder said.
"I thought when we got rid of President Biden as a candidate, when he withdrew or was driven out, I thought we'd end up with Kamala-nomics instead of Bidenomics, and it would be basically the same thing. But it's really much, much worse," he continued. "These are irrational policies that will drive us into an economic ditch."
Fox News’ Paul Steinhauser, Patrick Ward and Thomas Catenacci contributed to this report.
