An unrealized capital gains tax taxes some increase in an asset’s value before its owner sells it. The 25% plan associated with Kamala Harris in 2024 was a proposed minimum tax for people with wealth above $100 million—not a tax on every homeowner’s annual home-price increase. Harris’s campaign said it supported provisions in President Joe Biden’s FY2025 budget; her own separate proposal to raise the long-term capital-gains rate to 28% was a different policy.
What is an unrealized capital gain?
A capital gain is the increase in an asset’s value compared with its tax basis, generally the amount invested or otherwise used to determine taxable gain. If an asset has risen in value but its owner has not sold or otherwise disposed of it, the increase is generally called an unrealized gain. For example, if shares with a $100,000 basis are worth $150,000 and remain unsold, the $50,000 increase is unrealized.
Under ordinary realization-based capital-gains taxation, tax generally applies when a gain is realized, such as through a sale. An unrealized-gains tax changes the timing: it can require a tax payment based on covered appreciation before a sale. The Biden administration’s FY2025 Greenbook described its plan as a minimum-tax framework that generally included unrealized gains in its calculation.
What did the Biden FY2025 proposal involve?
A minimum tax for people above a wealth threshold
The U.S. Department of the Treasury’s FY2025 Greenbook, released in March 2024, proposed a 25% minimum tax for taxpayers with wealth above $100 million. Wealth meant assets less liabilities; the threshold was not simply annual income. The proposal’s tax base generally included taxable income plus unrealized gains, with regular tax and qualifying unrefunded, uncredited prepayments taken into account in calculating the minimum liability.
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That means “25% tax on unrealized gains” is an incomplete shorthand. The proposal was not a 25% annual tax on the full value of every asset, nor did it simply apply a flat charge to anyone’s entire portfolio appreciation. It was a minimum-tax calculation for taxpayers above the wealth threshold, taking tax already paid and prepayments into account.
Prepayments and later tax credits
The Greenbook proposed installment payments: the first year’s liability could be paid over nine annual installments, and later liabilities over five annual installments. Amounts paid before a gain was realized would count as prepayments against tax due when the gain was eventually realized, so the same gain would not be taxed twice under the proposal’s design.
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What if the assets were hard to sell or value?
Treasury acknowledged that taxing appreciation before sale raises liquidity and valuation problems. In 2022 remarks, Lily Batchelder, then Assistant Secretary for Tax Policy, said: “Despite the fact that they clearly represent income, unrealized gains are difficult to tax because of understandable liquidity and valuation concerns, which a realization event generally solves.”
The FY2025 Greenbook described accommodations for taxpayers whose wealth was largely in nontradable assets. Treasury’s design allowed taxpayers with predominantly nontradable wealth to defer minimum-tax payment on unrealized gains from those assets until realization, with an interest charge. Batchelder’s 2022 remarks described an interest cap of 10% of unrealized gains; that figure describes the proposal design in those remarks, not an enacted tax rule.
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Rather than require annual appraisals of every private or otherwise hard-to-value asset, Treasury proposed relying on existing valuation references—such as adjusted basis or values used for investment, borrowing, or financial statements—and increasing them using a conservative interest rate. PolitiFact’s August 30, 2024, summary said taxpayers with more than 80% of wealth in nontradable assets could choose to include only gains in tradable assets when determining the amount owed.
Would ordinary homeowners or small-business owners have owed this tax?
The proposal’s stated threshold was wealth above $100 million, and it included special treatment intended to address illiquid assets. It was not a proposal to tax ordinary homeowners’ annual home-price appreciation. An increase in a home’s estimated value, by itself, is not the same thing as a tax bill under the described plan.
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For scale, Batchelder estimated in her 2022 Treasury remarks that the design would affect “about 1 in 10,000 taxpayers,” with “more than one half of the revenue” coming from billionaires. Those were estimates about a proposal at that time, not observed outcomes under an enacted law or an official count of people ultimately taxed.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How was Harris’s separate capital-gains proposal different?
Harris’s campaign said it supported provisions in Biden’s FY2025 budget, including the billionaire minimum tax. But the September 2024 Harris-Walz campaign policy book separately proposed raising the long-term capital-gains tax rate from 20% to 28% for people earning $1 million or more a year. That was a proposed rate change for long-term gains, not the 25% minimum tax on income that generally included unrealized gains. The policy book said 99% of Americans would pay the same long-term capital-gains rate they paid then.
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| Policy | What it proposed | Who or what it covered |
|---|---|---|
| Biden FY2025 billionaire minimum tax, supported by Harris’s campaign | A 25% minimum-tax rate, generally including unrealized gains, with prepayments and liquidity provisions | Taxpayers with wealth above $100 million, according to Treasury’s March 2024 Greenbook |
| Harris-Walz campaign’s separate long-term capital-gains proposal | Raise the long-term capital-gains rate from 20% to 28% | People earning $1 million or more a year, according to the September 2024 campaign policy book |
PolitiFact reported on August 30, 2024, that the campaign declined to provide additional detail about its support for the Biden budget provisions and directed the outlet to prior reporting. The unrealized-gains plan is therefore best described as the Biden FY2025 budget proposal that Harris’s campaign supported, not as a detailed standalone unrealized-gains blueprint published by Harris.
Is the proposal law?
No tax liability arises under a presidential budget proposal by itself; Congress must enact tax legislation to change the tax code. The FY2025 billionaire minimum tax was a proposal, not an enacted tax under the materials described here. A separate bill, S. 2845, the Billionaires Income Tax Act, was introduced in September 2025 and referred to the Senate Finance Committee; it is a distinct proposal and should not be confused with the FY2025 Greenbook plan.
The practical distinction is between a proposal’s design and current tax law: the 25% minimum-tax framework discussed here describes a policy proposal, not a tax that people currently owe under that plan.
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