Each is part of the tax proposals each major party candidate promotes.
What are they?
Trump proposes increased tariffs:
A tariff is a tax that a government imposes on imported or exported goods or services. Tariffs are also known as customs duties.
- Revenue: Tariffs are a source of revenue for the government.
- Regulation: Tariffs are a form of regulation for foreign trade.
- Protectionism: Tariffs can help protect domestic industries by making imported products more expensive.
- Unfair practices: Tariffs can address unfair practices that other countries use to make their exports cheaper.
Tariffs can be fixed or variable. Fixed tariffs are a constant sum per unit of imported goods or a percentage of the price. Variable tariffs vary based on the price.
- From Investopedia: What Is a Tariff and Why Are They Important?
- Analysis: Trump’s 10 Percent Tariffs: Projected Impacts on U.S. Households and Allies.
- Analysis: Five Things to Know about Trump’s Tariff and Income Tax Proposals.
Harris proposes taxing unrealized capital gains:
Unrealized capital gains refer to the increase in the value of an asset that has not yet been sold. In other words, it’s the profit you’d make if you sold an asset at its current market price compared to its purchase price.
For example, if you bought a stock for $50 and its current market price is $70, you have an unrealized capital gain of $20 per share. This gain is “unrealized” because it only exists on paper until you actually sell the stock. Once you sell it, the gain becomes “realized” and can be subject to taxes depending on your jurisdiction and how long you held the asset.
- From Investopedia: What Are Unrealized Gains and Losses?
- Analysis of Harris’s Billionaire Minimum Tax on Unrealized Capital Gains.
- Analysis: What Is Unrealized Capital Gains Tax? Unpacking Kamala Harris-Backed Proposal On Ultra Wealthy.
