Recent viral reporting on Biden's proposed tax hikes has generated heated criticism and outrage online. Some say the proposed capital gains tax increase to 44.6% and an unrealized gains tax of 25% will predominantly affect the wealthy. Supporters insist the wealthy deserve to pay their “fair share.” Critics argue high earners already pay a significant portion of total taxes. Many also say the government should focus more on reducing its spending rather than increasing taxation.

Opposition to Unrealized Gains Tax

Discussions have ensued particularly about the proposed unrealized gains tax. This tax would be levied on any increase in value of an asset, even if it has not yet been sold. For example, if a person buys a stock for $100 and it increases in value to $150, they will have an unrealized gain of $50. Currently, Americans are not taxed on this gain until they sell the stock. Taxing unrealized gains is highly controversial, with opponents arguing it would be unfair and would cause financial hardships for people who have seen their assets increase in value but do not have the cash on hand to pay a tax on the gain.

The severe negative sentiment towards an unrealized gains tax is expressed in tweets like one from venture capitalist David Sacks. Many voters who align with this thinking say Biden’s proposed tax increase will destroy American taxpayers and business owners.

Let’s say you build a business from scratch and qualify for Biden’s new 25% unrealized gains tax. So you have to sell 25% of your business to pay the tax. But now you have to pay 44.6% cap gains + 13.3% CA on that. So you actually have to sell ~37%. Is this right?

— David Sacks (@DavidSacks) April 25, 2024

Another argument against taxing unrealized gains suggests it’s unfair because it requires taxpayers to pay taxes on income they haven’t received. Voters talk about the idea of a tax on unrealized gains as outright theft.

Most Americans seem to believe that Biden’s tax hikes would lead to negative economic consequences. They say it would force reduced investment and economic growth, discouraging entrepreneurship, which would harm the economy.

• Following 2024 Tax Day, sentiment toward taxes started to decline, falling from 48% on April 14 to 46% on the 15th and 44% 10 days later.
• Americans are also increasingly negative on the economy, with sentiment sinking to 42% following news about Biden’s proposed tax plans.

Many voters also discuss their belief that taxes are being misused by the government. They complain that money gets spent on things they disagree with or is not being distributed fairly. Two recent issues Americans complain are a misuse of tax dollars are illegal immigrant support and foreign aid.

Voter Group Reactions

Wealthy Americans who would be directly impacted by the new tax policies are most likely voice negativity about Biden’s plan. They argue it would deter investment and prevent doing business. They say it’s effectively double taxation since capital gains are often derived from income that has already been taxed.

Some small business owners who have assets but are not extremely wealthy also disapprove of the proposal. They express concerns that, even if they don’t reach the affected tax backet, it could indirectly impact their businesses if wealthy consumers and investors cut back on spending and investment.

Republican voters of all economic classes are also generally opposed to the tax hike. They say higher taxes will hurt economic growth, regardless of who is personally affected. They also argue it would penalize success and discourage entrepreneurship.

Democratic voters are generally supportive of the tax increase. However, some moderate Democrats have expressed concern about the potential impact on business and economic growth.

Many people online also point out that Biden’s proposal, if implemented, would impose the highest capital gains tax rate in history. They also highlight the fact that Jimmy Carter, who also proposed increased capital gains taxes, suffered politically.

Biden is proposing a 44.6% capital gains tax, the highest ever, previously set by Jimmy Carter.

Here's how that worked out for Jimmy Carter: pic.twitter.com/UFiiPl6Skb

— Joe Consorti ⚡ (@JoeConsorti) April 24, 2024

Democrats and Lower Economic Classes are in Favor

Biden defenders are generally more supportive of the tax hike, viewing it as a way to address income inequality. They argue the wealthy should pay more taxes and be prevented from monopolizing wealth. They say the additional revenue could be used to fund programs that benefit lower income individuals, such as education and healthcare.

Progressive voters and lower income Americans often push back against online complaints about higher taxes, claiming many who are complaining are not wealthy enough to be affected. They argue the rich benefit disproportionately from economic growth and should therefore contribute more in taxes.