The stock market would collapse under Harris’ tax plan, the billionaire hedge fund manager warns

A potential Trump nominee for US Treasury Secretary, who also happens to be a billionaire hedge fund manager, has explained how Vice President Kamala Harris’ tax plan could send markets into a rapid decline.

“At the beginning of her campaign she supported the tax on unrealized gains[s]. And if that were implemented, I think it would be devastating to the markets and cause a market crash,” John Paulson, president and founder of Paulson & Co., said Monday on “Cavuto: Coast to Coast.”

“Harris says she wants to increase taxes on capital gains from 20% to 28%. She wants to increase the corporate tax rate from 21% to 28%,” Paulson added. “But the only big thing: She wants to tax unrealized profits.”

The Trump ally joined Fox News earlier on Thursday, where he advocated working with Elon Musk to cut the federal deficit by $2 trillion.

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However, if Harris wins the 2024 presidential election, Paulson expressed concerns about the macroeconomic impact of her tax policies, which include a 25% “minimum tax” on wealthy households and an increase in taxes on capital gains and dividends for households with incomes of more than US$1 million -Dollars belong from 20% to 28%.

The tax on unrealized capital gains would be raised to 25%, and the political advocacy group Americans for Tax Reform said the tax proposal, combined with high state taxes, could result in many Americans paying tax rates of more than 50% on income.

Paulson criticized this: “When you raise taxes across the board, it generally has a negative impact on capital and a negative impact on the stock market.”

“All of Trump’s proposed tax cuts essentially benefit the hardworking Americans who are suffering the most under the Biden administration. The problem is that inflation has risen faster than real wages. So the average American is struggling to make ends meet. That’s why there’s a tax.” Tips, taxes and overtime tax on Social Security, a tax cut in those areas benefits working families, but you could contain the costs by capping them,” Paulson explained.

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“By imposing protections on these programs,” he continued, “you can give something to the programs.” [and] Benefits the Americans who need it most. And at the same time reduce costs for the Treasury.”

Although it is difficult to determine the true impact of potential tax plans, a new analysis by the bipartisan Committee for a Responsible Federal Budget found that Vice President Harris’s proposed tax and spending plans would create approximately $3.95 in additional debt over ten years would cause trillions of dollars. and former President Trump would increase the federal deficit by $7.75 trillion over the same period.

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Eric Revell of FOX Business contributed to this report.