Billionaire investor Mark Cuban, speaking on CNBC, warned that any move to tax unrealized capital gains would have a devastating impact on the stock market.
President Joe Biden has floated the idea as part of his broader tax agenda, targeting individuals with a net worth exceeding $100 million.
Cuban explained that the market could suffer drastically under such a proposal, potentially discouraging companies from going public due to the risk of being "whipsawed" by market volatility. This refers to the possibility that unrealized gains could rapidly shift into unrealized losses, leaving investors at a disadvantage in a dynamic market.
He noted that while Vice President Kamala Harris hasn't fully embraced or rejected Biden’s idea, her team understands the complications of such a tax. According to Cuban, who has recently been in talks with Harris’ campaign, she is unlikely to support the plan, recognizing the dangers it poses to market stability.
“They understand the issue,” Cuban said, suggesting Harris values fairness in taxation but is open to exploring alternatives. He mentioned that although Harris doesn't oppose the Biden tax plan outright, she has her own approach. Harris has already diverged from Biden's proposal on long-term capital gains tax rates, preferring to set the rate at 28%, rather than the 39.6% Biden proposed for households earning over $1 million.
Cuban emphasized Harris’s pragmatism, describing her as open-minded and business-oriented. He explained that her approach differs from ideological rigidity, instead focusing on what's best for the economy. Despite concerns about the lack of detailed economic policies from her campaign, Cuban defended Harris’s strategy, comparing her to a CEO managing a large, complex organization. "You have to make sure you get it right," he said.
