Fact check: Unrealized capital gains tax proposal of presidential candidates

ST. PAUL, Minn. (FOX 9) - Taxes are a hot topic in the presidential campaign, but if you’re getting your information from social media, there’s a good chance it’s misleading.

What we know

Taxing unrealized capital gains is the big talk right now.

That would be a tax on the rising value of things you own — like property — but before you sell them and take a profit.

Viral social media posts are sounding the alarm about Kamala Harris planning to tax unrealized capital gains.

The same theme runs through most of them: "If your house goes up in value, you’ll have to pay that tax".

But it’s simply not true for 99.9972% of Americans.

"It's only for people who have a worth of over $100 million for now," said University of Minnesota economics professor Dr. Christopher Phelan.

The "for now" from Phelan could be important.

The vice president hasn’t released a tax plan, but her campaign says she endorses the proposal made by President Biden.

It would’ve included the first ever tax on unrealized capital gains, but just for the ultra-wealthy.

Phelan says it has the potential to be a slippery slope.

"It has to be in some sense, because there's just not that much," he said. "Even though these guys are fantastically wealthy, there aren't that many of them"

There are fewer than 10,000, in fact.

Varying plans

During campaign rallies, the vice president and Gov. Tim Walz often focus on bringing down the cost of living, especially at the grocery store and for buying a home.

"The voters who are really up for grabs are those who have felt the pinch of inflation and the economy," said Mark Penn, a former adviser to the Clintons. "That's why Harris is moving to address the economy as quickly as possible."

A Penn Wharton analysis of competing budget proposals shows Trump’s would raise the federal deficit by $5.8 trillion over the next decade while Harris’ would add $1.2 trillion.

His plan focuses on tax cuts, especially for high earners and corporations.

Hers offers tax cuts for parents and low-income workers.

He would add some revenue through tariffs.

She would add it with heavier tax burdens on the wealthy and corporations, which Phelan says could backfire.

"If our tax rate for corporations is out of line with other countries, we saw Medtronic move to Ireland," he said.

There is at least one point of agreement: Both candidates have proposed some version of no tax on tips, but Phelan agrees with most economists on that, saying it makes absolutely no sense.