Gerstner details Invest America would seed $1,000 per account with up to $2,000 annual tax-free matching.
“They would seed it with a thousand dollars from the federal government, set up a four zero one k match. So companies or parents could match up to $2,000 tax free each year.”
Gerstner argues taxing unrealized gains would require forced liquidity and create situations where people pay taxes then lose everything.
“And then the third point, which you just mentioned, there would be numerous situations where you'd have people pay a tax and then the valuations would collapse.”
Gerstner estimates Trump tax cuts contributed 20% of S&P 500 gains and their expiration would be a headwind.
“some people have estimated that the tax decreases from the Trump tax cuts contributed to about 20% of the gains in the S and P 500.”
Gerstner acknowledges future capital gains taxes on Invest America accounts would offset initial federal contributions.
“At some point, you're going to have to pay taxes on the back end of those accounts. Right? A capital gains tax on the back end of the account.”