Business
Column: No, folks, Harris isn't planning to tax your unrealized capital gains — but a wealth tax is still a good idea
That fetid gust of hot air you may have detected wafting from Republican and conservative social media postings over the last day or two was a fabricated claim that Kamala Harris is plotting to tax everyone’s unrealized capital gains if she becomes president.
That would be a departure from current law, which taxes capital gains only when the underlying assets are sold, or “realized.”
That it’s a mythical allegation hasn’t stopped right-wingers and GOP functionaries from hand-wringing over the economic implications of any such change, and over the purportedly horrible impact on average Americans.
Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.
— Thomas Jefferson
Here, for instance, is the far-right blowhard Mike Cernovich, in tweeting Tuesday on X: “If you own a house, subtract what you paid for it from the Zillow estimate. Be prepared to pay 25% of that in a check to the IRS. That’s your unrealized capital gains taxed owed under the Kamala Harris proposal.”
And Chicago venture investor Robert Nelson: “Taxing unrealized gains is truly the most insane, economy destroying, innovation killing, market crashing, retirement fund decimating, unconstitutional idea, which was probably planted by Russia or China to destroy the economy. Dems need to run away from this wildly stupid idea.”
All right, guys, take a deep breath. Harris hasn’t proposed taxing your unrealized capital gains, or mine. What she has said, as the Harris campaign told me, is that she “supports the revenue raisers in the FY25 Biden-Harris [administration] budget. Nothing beyond that.”
So what’s in that Biden-Harris administration budget for fiscal year 2025?
The budget plan does indeed call for taxation of unrealized capital gains held by the country’s uber-rich. That’s part of its proposal for a 25% minimum tax on the annual income of taxpayers with wealth of more than $100 million — a wealth tax. If you’re a member of that cohort, lucky you. But at that level of affluence you don’t have grounds to complain about paying a minimum 25% of your annual income.
Anyway, there aren’t very many of you “centi-millionaires,” as the category is known—10,660 in the U.S., according to a 2023 estimate. That includes a handful of centi-billionaires such as Elon Musk ($249 billion, according to Forbes), Jeff Bezos ($198.5 billion) and Mark Zuckerberg ($185.3 billion). It’s doubtful that anyone in this category is poring over Zillow estimates to calculate the sale value of his or her house (or houses).
Several other proposals in the budget plan are relevant to taxes on the wealthy. One would restore the top income tax rate of 39.6%, which was cut to 37% in the Republicans’ 2017 Tax Cut and Jobs Act; Biden proposed to allow that cut to expire as scheduled next year. The restored top rate would apply to income over $731,200 for couples, $609,350 for singles, starting with this year’s income.
Another provision would raise the tax rate on capital gains and dividends to the same rate charged on ordinary income — but only on annual income exceeding $1 million for couples ($500,000 for single filers). Under current law, capital gains and dividends get a huge break: The top rate is 20%, though it’s zero for couples with income of $89,250 or less ($44,625 for singles), and 15% for those with income more than that but less than $553,850 ($492,300 for singles).
The preferential rates on cap gains “disproportionately benefit high-income taxpayers and provide many high-income taxpayers with a lower tax rate than many low- and middle-income taxpayers,” the White House explains. They also “disproportionately benefit White taxpayers, who receive the overwhelming majority of the benefits of the reduced rates.”
The proposal would also eliminate the notorious step-up in basis enjoyed by heirs. Currently, if those inheriting stocks, bonds, real estate or other capital assets sell those assets, they’re taxed only on the difference between what they were worth at the time of the original owner’s death and their value upon the subsequent sale — not the difference between what they cost when purchased (the “basis”) and what they were worth when ultimately sold.
This process turns the capital gains tax into what the late Ed Kleinbard, the tax expert at USC, called America’s only voluntary tax. Since owners of capital assets don’t pay tax on their appreciation in value until they’re sold, they can defer the tax indefinitely by simply not selling. When they die, the step-up in basis extinguishes the prior capital gains liability forever, leaving only a tax on any gains for the heirs reaped starting from the date of their inheritance.
And rich families can enjoy the benefits of their capital portfolio by borrowing against it, never having to sell. That’s an option seldom available to the ordinary taxpayer, who may have to sell to make ends meet. This is how those families perpetuate their fortunes without paying their fair share of income tax.
The Biden plan would repeal the step-up for heirs by levying the capital gains tax on the bequeathed asset, calculated from the original purchase and charged to the decedent’s estate. Inheritances by spouses would be exempt, and the existing exemption of $250,000 in gains per person on the transfer of a principal residence would remain in effect.
Biden’s plan also would increase the net investment income tax and Medicare tax rates to 5% each from the current 3.8% on income over $400,000. That would bring the top capital gains rate to 44.6%.
Is that a lot? Too much? Not enough? It’s true that the capital gains tax has typically been lower than the tax on ordinary income, reaching as high as 40% only briefly in the 1970s. Overall, however, it’s a relative pittance in postwar terms: The top tax rate on ordinary income was 90% or higher from 1944 through 1963, 70% from 1965 through 1981, and 50% from 1981 through 1986. Americans enjoyed unexampled prosperity throughout most of that time span.
That brings us back to the wealth tax idea, which terrifies the rich and their water-carriers in the press and punditocracy. Noah Rothman of the right-wing National Review, for example, got especially exercised over Michelle Obama’s critique of “the affirmative action of generational wealth” in her speech at the Democratic convention Tuesday night.
“The idea that accumulating material wealth and bequeathing it to your offspring with the hope that they build on it and do the same for their children is one of the fundaments of the American social compact,” Rothman grumbled. “Trying to make that sense of industry into a source of shame is absurd.”
The idea that the offspring of millionaires and billionaires are building on their inherited wealth is pretty, but in practice rare. As the wealth management firm UBS reported, last year for the first time in the nine years that it had been tracking extreme wealth, billionaires “accumulated more wealth through inheritance than entrepreneurship.” This “great wealth transfer,” it added, “is gaining momentum.”
As I’ve written before, the concentration of wealth in America has reached levels that make the gilt of the 19th century Gilded Age look like dross. In the U.S. there were 66 billionaires in 1990, and about 750 in 2023.
Critics of a wealth tax often assert that it’s unworkable because it’s hard to value non-tradable assets — think artworks, or almost anything other than stocks, bonds and real estate, which can be valued at a market price. The Biden plan has an answer to that. Non-tradable assets would be valued at their purchase price or their value the last time they were borrowed against or invested in, with an annual increase based on Treasury interest rates.
As for those who think there’s something un-American in a wealth tax, they can take up the issue with the Founding Fathers, who considered generationally accumulated wealth to be inimical to a free republic.
“Whenever there is in any country, uncultivated lands and unemployed poor,” Thomas Jefferson wrote to James Madison in October 1785, “it is clear that the laws of property have been so far extended as to violate natural right.”
Madison in 1792 viewed the duty of political parties as acting to combat “the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches.” Benjamin Franklin urged the Constitutional Convention in Philadelphia, albeit unsuccessfully, to declare that “the state has the right to discourage large concentrations of property as a danger to the happiness of mankind.”
They didn’t seem concerned that fighting the immoderate accumulation of riches would be complicated or unnecessary. Quite the opposite: They would appear to agree, were they with us today, with the line beloved of equality advocates that “every billionaire is a policy failure.”
Put it all together, and it sounds almost as if Michelle Obama was channeling the Founders. And if Kamala Harris supports the provisions in the Biden budget plan aimed at requiring the super-rich to pay their fair share of taxes — as her campaign confirms — she’s channeling them too.
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
-
Los Angeles, Ca1 hour agoMan claiming to be armed robs Culver City bank, gets away with $10,000
-
Detroit, MI1 hour agoFired Detroit TV anchor Taryn Asher files sex discrimination lawsuit against old station, claims new GM protected men
-
San Francisco, CA2 hours agoSan Francisco family devastated as they face nearly 90% rent increase
-
Dallas, TX2 hours agoWings’ top pick Azzi Fudd hosts clinic as Cash App donates to Dallas nonprofit
-
Miami, FL2 hours agoPatients left scrambling for care after Miami-Dade woman accused of operating an unlicensed surgery recovery center
-
Boston, MA2 hours agoClover plans to reopen some locations after sudden closure, thanks to an anonymous investor
-
Denver, CO2 hours agoNew report finds Denver metro home buyers and sellers experiencing ‘unattainability fatigue’
-
Seattle, WA2 hours agoSeattle mayor grilled over public safety, affordability, CCTV
