A Troubling Agenda with Dire Consequences
Kamala Harris, the current Vice President of the United States, has put forth several economic policies that could have profound and potentially disastrous consequences for the U.S. economy. Among these policies are proposals for price fixing to prevent price gouging and a controversial tax on unrealized capital gains. While these policies may be presented as well-intentioned efforts to protect the American public, they could lead to a severe economic downturn, hurting not only the wealthy but also the middle class and the overall stability of the nation.
The Perils of Price Fixing: A Threat to Free Market Principles
Price fixing, which Harris supports as a method to combat price gouging, might sound like a compassionate approach to shielding consumers from inflated prices. However, this policy fundamentally undermines the principles of a free market economy. Price fixing involves the government setting limits on how much businesses can charge for goods and services, particularly during times of crisis or high demand. While this might seem like a way to protect consumers, it could lead to severe unintended consequences.
One of the primary issues with price fixing is that it disrupts the natural balance of supply and demand. When prices are artificially capped, producers have little incentive to increase supply, leading to shortages and black markets where goods are sold at even higher prices. This is not mere speculation; it’s a historical reality. The 1970s gas crises, where price controls led to widespread shortages and long lines at gas stations, serve as a stark reminder of what happens when the government meddles with market prices.
Small businesses, in particular, would suffer under price fixing. Unlike large corporations that might be able to absorb the financial hit, small businesses often operate on razor-thin margins. Being forced to sell products at government-mandated prices could push these businesses into bankruptcy, reducing competition, and leading to fewer choices and higher prices in the long run.
Unrealized Capital Gains Tax: Punishing Wealth Creation and Innovation
Another controversial policy supported by Harris is the tax on unrealized capital gains. Under this proposal, individuals with assets exceeding $100 million would be taxed not just on income or profits from sold assets, but on the increase in value of assets they still hold. While this might be framed as a way to target the ultra-wealthy, the implications of such a tax could ripple through the entire economy.
First, taxing unrealized gains is fundamentally flawed. Traditionally, capital gains taxes are imposed when an asset is sold, reflecting the actual profit realized by the seller. Harris’ proposal, however, would tax individuals on gains they have not yet realized—gains that could easily evaporate if the market takes a downturn. This kind of taxation not only penalizes success but also discourages long-term investment, which is vital for economic growth and innovation.
Moreover, while the tax currently targets those with $100 million in assets, there is nothing to stop the government from lowering this threshold in the future. What begins as a tax on billionaires could easily expand to include millions of Americans with far more modest savings. Middle-class families who have diligently saved and invested for their future could suddenly find themselves facing taxes on gains they haven’t even cashed in on. This kind of uncertainty could lead to a reduction in investment across the board, stifling economic growth and innovation.
Remember this is how income taxes started – 1862 – President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation’s first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000. Now look at the Federal income tax rate….. Is your hate for Trump go great that you would be willing to give up everything you have worked for to a government that wastes over 15% of the tax revenue each year. Do you really think the new dorm at the Air Force Academy really needs 600 Million to build a new 600,000 square foot dorm? $1000 a square foot?
The Impact on Economic Growth and Innovation: A Grim Outlook
The combination of price fixing and taxes on unrealized capital gains creates a hostile environment for economic growth. Investors, both large and small, may become hesitant to put their money into long-term ventures if they fear being taxed on gains before they’ve even realized them. This stifles the very innovation and entrepreneurship that drives the American economy forward.
Businesses, particularly in tech and high-growth industries, rely on capital investments to fund research and development. If investors pull back due to punitive tax policies, these businesses will struggle to find the funding they need to innovate and grow. The long-term result could be a slowdown in technological advancement, with the United States losing its competitive edge on the global stage.
The Risk to American Competitiveness: Global Implications
In today’s global economy, capital is more mobile than ever. If the United States becomes an unfriendly environment for investment due to policies like those proposed by Harris, capital will flow to countries with more favorable tax regimes. This would not only weaken the U.S. economy but also strengthen our global competitors, particularly in regions like Asia, where tech innovation is booming.
The U.S. has long been a leader in technological innovation and economic growth, but these policies could jeopardize that status. If investment dries up, the U.S. could see a decline in its global influence, with countries like China potentially taking the lead in critical areas like technology and manufacturing.
Middle-Class Families: The Real Victims of These Policies
While Harris’ policies are marketed as targeting the wealthy, the truth is that middle-class Americans stand to lose the most. Price fixing may offer temporary relief from high prices, but the long-term effects include reduced availability of goods, lower quality, and fewer choices—outcomes that disproportionately impact middle and lower-income families.
Similarly, the tax on unrealized capital gains, while initially aimed at the wealthy, could easily be expanded to include a broader segment of the population. As the government looks for new sources of revenue, the threshold for what constitutes “wealth” could be lowered, pulling in millions of Americans who were never intended to be taxed at such rates. This could lead to a situation where middle-class families, who have worked hard to save and invest, are punished for their financial prudence.
A Dangerous Path Forward
Kamala Harris’ policies on price fixing and unrealized capital gains taxes may be intended to create a fairer economy, but they are fundamentally flawed. They threaten to disrupt the free market, stifle innovation, and undermine the economic growth that has made the United States a global leader. The potential for these policies to expand beyond their initial scope poses a significant risk to middle-class Americans, who could find themselves bearing the brunt of these misguided initiatives.
In the end, these policies could do more harm than good, leading to economic stagnation, reduced competitiveness, and a diminished quality of life for millions of Americans. As the United States faces an increasingly complex global economy, we must ask ourselves: Is our disdain for certain political figures worth risking the entire economy? Are we willing to lose our savings and future prosperity over policies that could cripple our nation?
