{"id":11928,"date":"2025-05-21T09:30:36","date_gmt":"2025-05-21T16:30:36","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=11928"},"modified":"2025-05-21T09:32:05","modified_gmt":"2025-05-21T16:32:05","slug":"australias-unrealized-gains-tax-will-be-a-lesson-in-economic-suicide","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2025\/05\/21\/australias-unrealized-gains-tax-will-be-a-lesson-in-economic-suicide\/","title":{"rendered":"Australia’s Unrealized Gains Tax Will Be A Lesson In Economic Suicide"},"content":{"rendered":"\n

This is an interesting write up, and especially the Atlantic City reference. And Commiefornia was rumbling about doing the same thing, though I seem to remember it stalled out. Also worth mentioning, if you want to leave the country and denounce your US citizenship you have to pay the same tax on unrealized gains<\/a>, so it’s already in existence for a very limited circumstance here in the US.<\/p>\n\n\n\n

https:\/\/www.zerohedge.com\/markets\/australias-unrealized-gains-tax-will-be-lesson-economic-suicide<\/a><\/p>\n\n\n

<\/div><\/div><\/div>\n\n\n

By QTR’s Fringe Finance<\/p>\n\n\n\n

I\u2019ve spent years warning about the economic dangers<\/a> of policies that attempt to tax wealth before it\u2019s realized, and now, like a slow-motion train wreck, we\u2019re about to witness exactly why those warnings matter.<\/p>\n\n\n\n

Australia\u2019s new move to tax unrealized capital gains<\/a> is one of the most reckless policy decisions I\u2019ve ever seen \u2014 and keep in mind, I had front row seats to an \u201cInflation Reduction Act\u201d that added more than $1 trillion in spending.<\/p>\n\n\n\n

Taxing unrealized gains is equal parts outright f*cking mathematically insane <\/em>and cut-and-dry <\/em>authoritarian. And while I\u2019m appalled by the policy itself, there\u2019s a perverse part of me that\u2019s almost glad it\u2019s happening in Australia first\u2014because the disastrous results will be on full display for the world to see.<\/p>\n\n\n\n

Starting in July 2025, the Albanese government is set to debut its latest economic masterstroke: taxing imaginary money. That\u2019s right\u2014if you\u2019ve got more than $3 million sitting in your superannuation, not only will you get slapped with a 30% tax, but it doesn\u2019t even matter if you actually made<\/em> any money.<\/p>\n\n\n\n

Didn\u2019t sell anything? Didn\u2019t cash out? Never saw a cent? Tough luck\u2014Big Brother took a peek at your account, saw some numbers went up, and decided you owe them a slice of your hypothetical success.<\/p>\n\n\n\n

This isn\u2019t just bending the rules of how taxation and private property works\u2014it\u2019s snapping them clean in half and using the pieces to beat your rights to death. For as long as economies have existed, the deal was simple: you sell an asset, you make a profit, and then you pay tax. You know, after<\/em> you\u2019ve actually made money. Because taxing cash that doesn\u2019t exist yet is the kind of thing you expect from crackheads playing Monopoly, not national policy.<\/p>\n\n\n\n

But here we are. Australia is now sprinting headfirst toward a future where you get billed for wealth that isn\u2019t liquid, isn\u2019t realized, and, if the market tanks tomorrow, might never even exist<\/em>. It\u2019s like being forced to pay income tax on the raise your boss almost<\/em> gave you but didn\u2019t, or footing the bill for the lottery jackpot on the billboard on the side of I-95 that you didn\u2019t win.<\/p>\n\n\n\n

\"\"\/<\/a><\/figure>\n\n\n\n

The fallout is not rocket science. People will be forced to liquidate assets\u2014probably the wrong ones, at the worst possible time\u2014just to scrape together enough real<\/em> money to cover taxes on their fake<\/em> money. Don\u2019t have the cash lying around to pay that bill? Sounds like a you<\/em> problem. Better start liquidating. And this isn\u2019t just stocks we\u2019re talking about. Real estate? Private businesses? Long-term investments you hold precisely because they\u2019re supposed to be safe and stable? All fair game in a fire sale.<\/p>\n\n\n\n

But wait, it gets even better. That $3 million threshold? It\u2019s not even indexed to inflation. So as the value of money inevitably erodes, more and more regular people will find themselves dragged into this mess. It\u2019s like the $1,200 handpay rule in Atlantic City and Las Vegas: it was created in the 1800s when $1,200 was enough to buy a private island, but as the purchasing power of the dollar has eroded, the rule has been kept in place, with the recalibration serving as way to monitor more and more transactions.<\/p>\n\n\n\n

With these unrealized gains, today it\u2019s \u201conly the rich,\u201d but tomorrow it\u2019s anyone who happened to save diligently or saw their house value rise because some genius decided to inflate the housing market even more.<\/p>\n\n\n\n

So, if you\u2019re sitting there thinking, \u201cWell, that won\u2019t affect me,\u201d just wait. You might not be rich enough for the government\u2019s shakedown yet<\/em>, but thanks to inflation and asset bubbles, they\u2019ll be at your door before you can say \u201cunrealized gains.\u201d<\/p>\n\n\n\n

Back in 2024, I wrote about why taxing unrealized gains<\/a> in the U.S. would be a catastrophic policy error. I warned that it would lead to forced sales, create liquidity crises, and punish anyone who dares to invest in volatile or long-term assets. Investors will avoid riskier assets that fluctuate in value because even a temporary increase could trigger a tax liability before they\u2019ve seen any real return. This creates a chilling effect on investment in startups, innovation, and anything with a long payoff horizon.<\/p>\n\n\n\n

It would also cause monstrous capital flight out of the U.S., as I\u2019m guessing we\u2019ll soon see in Australia.<\/p>\n\n\n\n

\"\"\/<\/a><\/figure>\n\n\n\n

Then there\u2019s the bureaucratic nightmare of it all. Valuing assets for tax purposes every single year is an administrative quagmire. How do you accurately value a private business annually? How do you value collectibles, real estate, or other non-liquid assets in a way that\u2019s fair and consistent? The government doesn\u2019t have that kind of precision, and neither do most investors. What you end up with is a system riddled with errors, disputes, and compliance headaches for both taxpayers and the government.<\/p>\n\n\n\n

Yet despite all these glaring problems, Australia is going through with it. And while I genuinely feel for the Australians who are about to suffer the consequences of this insanity, there\u2019s also a silver lining. The rest of the world is watching. This is about to become the textbook case study in how not to run an economy. If you want to see what happens when a government taxes phantom wealth and forces people to pay cash they don\u2019t have, just keep your eyes on Australia over the next few years.<\/p>\n\n\n\n

My prediction? You\u2019ll see a mass exodus of capital. People will restructure their investments, move funds offshore, and pull money out of productive sectors of the economy. You\u2019ll see market volatility as investors dump assets to avoid future tax liabilities. You\u2019ll watch the property market distort as people chase after tax shelters. And ultimately, you\u2019ll see economic growth grind down under the weight of a policy that punishes investment and rewards government overreach.<\/p>\n\n\n\n

In a strange way, I\u2019m thankful this is happening\u2014not because I support it, but because it will stand as a stark, irrefutable warning to every other country foolish enough to consider the same policy. The Australian government is about to run a live experiment in economic self-sabotage, and the results will be undeniable. In my opinion, after this plays out, no serious policymaker with a shred of economic literacy will be able to look at the forthcoming outcomes and still argue that taxing unrealized gains is anything but a disastrously stupid idea.<\/p>\n","protected":false},"excerpt":{"rendered":"

This is an interesting write up, and especially the Atlantic City reference. And Commiefornia was rumbling about doing the same thing, though I seem to remember it stalled out. Also worth mentioning, if you want to leave the country and denounce your US citizenship you have to pay the same tax on unrealized gains, so […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-11928","post","type-post","status-publish","format-standard","hentry","category-world"],"blocksy_meta":[],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=11928"}],"version-history":[{"count":3,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11928\/revisions"}],"predecessor-version":[{"id":11931,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/11928\/revisions\/11931"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=11928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=11928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=11928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}