By Paul Wallis
June 4, 2025
DIGITAL JOURNAL
White House crypto czar David Sacks says the US government bitcoin reserve 'will not cost taxpayers a dime' - Copyright AFP/File INA FASSBENDER
Unrealized capital gains are the increases in the paper value of assets like stocks, Bitcoin, and other markets. If you make money on paper, but don’t cash in, you could pay 15% in tax on those gains.
This approach completely rewrites the script for the nouveau riche and any number of financial deals.
It’s much trickier than it looks.
What’s not at all surprising is the obvious demand for revenue. Nonpayment of tax and massive tax evasion over all these years haven’t helped. Making heroes out of tax parasites who put their assets offshore hasn’t done much good, either. Add to this the constantly rising cost of public services driven by endless price rises from the private sector, and a tax like this is pretty much inevitable.
To coin a phrase, “Greed is grotesque”.
To be more specific, it’s this grotesque.
This idea of a new tax is a self-inflicted injury for the finance sector and the “austerity addicts” in various political ideologies. These are the people who destroy public revenue on principle. They then cut services and create havoc in the Main Street economy.
The level of basic economic illiteracy is quite astonishing.
For example:
The maniacal privatization of public assets has also lost all the cash cows governments can use to offset tax increases.
The lost revenue has to be made up either by borrowing or by raising taxes. There aren’t all that many options.
Any no-go zone in taxes creates a sort of black hole of lost revenue. Ironically, it also starts a virtual tide of financial scams. You’ll have seen these things everywhere, talking about tax loopholes.
There’s no such thing as a tax loophole. Something is either taxable or it isn’t.
Paying tax is simply contributing your share to society.
Meanwhile, things have become ridiculously complex. The fact is that decades of constant undermining of revenue have led to new taxes.
This proposed new tax moves the whole ballpark. It’s almost unprecedented. The usual theory is that you pay tax on receipt of money. I say “almost” because Australian superannuation is taxed pretty much in the same way, at roughly the same rate. That’s on established value for the super, though, not on “unrealized gains”, as far as I know.
Not this time.
Tax cheats are undeniably parasites. They’re also pretty good at fraud. “The security for the loan is in crypto”, for example. If you know how far and fast any crypto can move, that’s more speculation than lending. Assets in “zombie companies” are another example. Paper transactions often aren’t worth the paper they’re written on. There’s no way of knowing what those stocks are really worth.
Despite this, I’m not entirely in favor of this new tax. I don’t think the superannuation tax is entirely justified, and this is similar.
People need to be able to build personal capital, particularly long-term.
Cutting out 15% of that capital per year looks like an own goal. That’s also why I think the super tax is counterproductive.
Globally, this could be a serious game changer. The positive side is that it might stop booms and busts in market assets, idiotic speculation, and cool down the self-infatuated markets.
It might also lead to off-market assets, a sort of “black market” in securities. If you can’t pin down asset values, what are you taxing? Criminals don’t pay taxes.
If this sort of tax is possible, it could become very popular with governments worldwide.
_______________________________________________________
Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
White House crypto czar David Sacks says the US government bitcoin reserve 'will not cost taxpayers a dime' - Copyright AFP/File INA FASSBENDER
Unrealized capital gains are the increases in the paper value of assets like stocks, Bitcoin, and other markets. If you make money on paper, but don’t cash in, you could pay 15% in tax on those gains.
This approach completely rewrites the script for the nouveau riche and any number of financial deals.
It’s much trickier than it looks.
What’s not at all surprising is the obvious demand for revenue. Nonpayment of tax and massive tax evasion over all these years haven’t helped. Making heroes out of tax parasites who put their assets offshore hasn’t done much good, either. Add to this the constantly rising cost of public services driven by endless price rises from the private sector, and a tax like this is pretty much inevitable.
To coin a phrase, “Greed is grotesque”.
To be more specific, it’s this grotesque.
This idea of a new tax is a self-inflicted injury for the finance sector and the “austerity addicts” in various political ideologies. These are the people who destroy public revenue on principle. They then cut services and create havoc in the Main Street economy.
The level of basic economic illiteracy is quite astonishing.
For example:
The maniacal privatization of public assets has also lost all the cash cows governments can use to offset tax increases.
The lost revenue has to be made up either by borrowing or by raising taxes. There aren’t all that many options.
Any no-go zone in taxes creates a sort of black hole of lost revenue. Ironically, it also starts a virtual tide of financial scams. You’ll have seen these things everywhere, talking about tax loopholes.
There’s no such thing as a tax loophole. Something is either taxable or it isn’t.
Paying tax is simply contributing your share to society.
Meanwhile, things have become ridiculously complex. The fact is that decades of constant undermining of revenue have led to new taxes.
This proposed new tax moves the whole ballpark. It’s almost unprecedented. The usual theory is that you pay tax on receipt of money. I say “almost” because Australian superannuation is taxed pretty much in the same way, at roughly the same rate. That’s on established value for the super, though, not on “unrealized gains”, as far as I know.
Not this time.
Tax cheats are undeniably parasites. They’re also pretty good at fraud. “The security for the loan is in crypto”, for example. If you know how far and fast any crypto can move, that’s more speculation than lending. Assets in “zombie companies” are another example. Paper transactions often aren’t worth the paper they’re written on. There’s no way of knowing what those stocks are really worth.
Despite this, I’m not entirely in favor of this new tax. I don’t think the superannuation tax is entirely justified, and this is similar.
People need to be able to build personal capital, particularly long-term.
Cutting out 15% of that capital per year looks like an own goal. That’s also why I think the super tax is counterproductive.
Globally, this could be a serious game changer. The positive side is that it might stop booms and busts in market assets, idiotic speculation, and cool down the self-infatuated markets.
It might also lead to off-market assets, a sort of “black market” in securities. If you can’t pin down asset values, what are you taxing? Criminals don’t pay taxes.
If this sort of tax is possible, it could become very popular with governments worldwide.
_______________________________________________________
Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
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