Zach Townsend, CEO and co-founder of Meanwhile, has expressed concern about Kamala Harris’ proposal for a 25 percent tax on unrealized capital gains. An outspoken critic of the plan, Townsend warns that it could lead to a massive selloff in crypto markets and hurt investors.
Last month, Harris, the current vice president, backed a bold new fiscal policy that could revolutionize the way unrealized gains are taxed in the United States.
The proposal is part of a broader economic strategy under the current administration, which proposes a 25 percent tax on the value-added of unsold assets, including cryptocurrencies.
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Critics argue that the plan is a drastic departure from traditional tax norms, which typically only tax profits from actual sales.
The new tax plan specifically targets Americans with a net worth of more than $100 million.
While the policy aims to address inequities in the current tax system, it has raised concerns among investors.
According to Townsend, the implementation of such a tax plan will force large investors to sell parts of their portfolios. This could greatly increase the supply of digital currencies in the market and, as a result, lower prices.
In fact, if unrealized gains are taxed, investors’ incentive to hold is reduced. This, in turn, will lead to increased volatility in the market and away from long-term investment strategies.
As the 2024 US election approaches, the crypto industry has become a major battleground for Kamala Harris and Donald Trump. Currently, the crypto community has expressed more support for Trump.
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