Anthony Scaramucci, former White House communications director and founder of SkyBridge Capital, has warned that a proposed capital tax on unrealised gains could severely damage US capital markets.

In an exclusive interview with Saxo for their US Election Hub, Scaramucci expressed scepticism over the feasibility of the tax, introduced by Kamala Harris, suggesting it would struggle to gain support even within the Democratic Party.

“Listen, that’s never going to happen,” Scaramucci said. “They don’t have enough Democratic votes to pass that. No Republican I know would vote for that. There’s many Democrats that would never vote for that.” He added that if such a tax were introduced, it would have a catastrophic impact on trading behaviour, deterring investment and destabilising the capital market in the United States.

Discussing the current economic landscape, Scaramucci predicted that the Federal Reserve would implement three 0.25% interest rate cuts by the end of the year, barring any catastrophic events. He believes these cuts are necessary to maintain market stability and prevent the US dollar from losing ground in a competitive global landscape.

Scaramucci also commented on the S&P 500’s heavy reliance on the so-called ‘Magnificent 7’—the top tech giants that dominate the index. He suggested that breaking up these companies from an anti-trust perspective could lead to more innovation, drawing parallels to the breakup of the AT&T Bell System in 1984, which he credits with unleashing technological advancements like the internet and social media.

Despite the turbulence in the cryptocurrency market, exacerbated by the collapse of FTX, Scaramucci remains bullish on digital assets. He acknowledged the damage to institutional trust but noted that firms like BlackRock still hold significant investments in Bitcoin, reflecting enduring confidence in the long-term potential of crypto. “I think it’s damaged, but I also think that we have short-term memories,” he said, pointing to the substantial holdings in Bitcoin by ETFs as evidence of crypto’s resilience.

On the broader political landscape, Scaramucci stated that Fortune 500 CEOs generally support Kamala Harris over Donald Trump, a sentiment he attributed to a preference for more predictable and stable governance. He criticised Trump’s leadership, stating, “I was once for Trump, I got to see up close and personal what he’s like. My conclusion was that he can’t be President again.”