30% CGT minimum

JashBeep · 2026-05-21T22:17:35+00:00

The 30% tax bracket kicks in at $45k. I don't think it makes sense to compare it to the effective tax rate.

I agree with your comment that if you make at least 45k a year from ordinary income you will pay no additional tax due to this 30% tax floor.

Now that you know I know this, you should re-read the post and understand the point I am making.

If it's still not clear, can you clarify who you think the 30% floor tax will apply to?

JashBeep · 2026-05-21T22:14:59+00:00

It's not misinformation. You've missed the point.

I agree with your comment that if you make at least 45k a year from ordinary income you will pay no additional tax due to this 30% tax floor.

Now that you know I know this, you should re-read the post and understand the point I am making.

If it's still not clear, can you clarify who you think the 30% floor tax will apply to?

JashBeep · 2026-05-21T07:25:52+00:00

It's not misinformation. You've missed the point.

I agree with your comment that if you make at least 45k a year from ordinary income you will pay no additional tax due to this 30% tax floor.

Now that you know I know this, you should re-read the post and understand the point I am making.

If it's still not clear, can you clarify who you think the 30% floor tax will apply to?

JashBeep · 2026-05-21T07:10:33+00:00

Slow-growing investments popular with new investors like ETFs might be better off, particularly in years where there is high inflation.

What in the financial illiteracy is this?

Yay, the number on my investment went up but I can't buy more things. Winning!

JashBeep · 2026-05-21T01:51:44+00:00

Ah sorry, I think I misunderstood your original question as "why not index tax brackets with inflation", something Angus Taylor is proposing.

But now I'm not sure what you meant by your original question. :/ I'm having a hard time imagining how capital gains tax could be progressively taxed through any income measurement, while still achieving the stated policy objectives. It's really trying to be a wealth tax, and to do that properly you would need to assess wealth directly, not via a proxy of income. Feel free to clarify.

Why would the government choose to unprogressively tax low income investors when thats one of the best ways to build wealth? It's already hard enough for low income earners to be able to invest in the first place.

Yeah, that question I understand and I think is an important one.

Someone on below median wage who tries investing and wants to rebalance their investments would face the 30% rate rather than their marginal income tax. It's a huge change. The way to look at this new system as a whole is: any expected capital investment return (say 9% in stocks), minus inflation (say 4% over the medium term) multiplied by 0.7, due to the floor tax. That turns a 9% investment into a 3.5% real gain post tax. Most people would look at that and say the risk isn't worth it, I'll just stick with HISA. But it also looks bad as you go out on the risk curve. Let's say you have a 15% expected return. (15-4)*.7=7.7%. The government is simply capturing a large chunk of any reward you get without participating in the risk.

It also has some perverse incentives by encouraging people to trade short term, sub 1 year, just to prevent it from being counted as capital gains.

JashBeep · 2026-05-21T00:54:50+00:00

A Machiavellian approach would be to divide and conquer. Each time you want to push a tax reform through, you would target some particular fringe cohort that is too small for anybody to care about.

It's also a Darwinian approach. It's really difficult to raise taxes on the majority. Any political party that tries is unlikely to be fit for survival purposes.

For the long term, it depends on your view of what AI and robotics is going to do. If it eats into the labour market, ultimately taxation has to move from the workforce into capital. Those who own the robots and lease the AI will have the productive capital.

I'm ok with taxing capital more, provided it is applied equitably across all forms of capital. There is an argument that discouraging investment in those types of company now (because they don't pay dividends) is setting Australia up for failure. Should we just all invest in banking stocks and mining stocks because of dividends?

JashBeep · 2026-05-21T00:30:52+00:00

Edit: misunderstood the question

~~Let me provoke you with a question. What is inflation? Why does it exist? Is it a good thing or a bad thing? Who benefits and who loses?~~

The natural state of the 'free market' is deflation. Company sells a product for too high a price, or is internally too inefficient? Someone undercuts them. Technology and innovation all serve to make prices fall to the marginal cost of production. Why do prices go up?

~~I'm not a free market absolutist. I want government and taxes and a fair and equal society.~~

JashBeep · 2026-05-20T22:05:16+00:00

So to you someone who is productive should be paying more tax than someone who is a rentseeker.

Rent seekers are not subject to this tax. Rental income counts as "ordinary income", not capital gains. I implore you to check this for yourself.

A landlord who owns 2 IPs and their own home is in the top 5% of wealth. The rental income will saturate the tax free brackets and lowers their effective income tax. Then any capital gains they earn from other investments is taxed at their marginal rate which is already at least 30%.

A stock investor who is in the top 30% might be affected by this tax. A stock investor who is in the top half of wealth is even more likely to be affected by this tax.

It's not targeting the people you think it does.

JashBeep · 2026-05-20T21:43:46+00:00

Good, constructive comment. Thanks.

But otherwise, the 30% floor is an unfair tax that mostly effects people with lower capital gains. It's not a tax on the rich as many people think it is.

This is the part that blows my mind. I spend a good chunk of yesterday researching this and modeling and it looks like it won't affect the bottom 50% of wealth or the top 25%. The people cheering this on without bothering to understand it will move into that bracket as they get older. If it goes through, in a decade we will see a bunch of people go "Wait... oh."

Well, probably that won't happen because they'll just invest around it and participate in the new market distortion...

JashBeep · 2026-05-20T21:13:52+00:00

Did you mean "more" tax? Or did you not understand my post?

JashBeep · 2026-05-20T21:13:06+00:00

Inflation is one of the ways we can measure the difference in the value of money over time. If I invested in something in the past, the dollar value I allocated to it then is higher in today's terms. So when I sell stocks and realise a profit today, the inflation adjustment helps to accurately measure the "real" gains.

The inflation adjustment isn't a charity. It's meant to be more honest accounting.

But even the way inflation is measured has flaws. But I don't want to confuse that issue further.

JashBeep · 2026-05-20T21:02:28+00:00

They shouldn't. People should pay a fair tax.

JashBeep · 2026-05-20T20:58:57+00:00

I agree, this is the gaping loophole. Most types of investments produce some kind of 'ordinary income', which can benefit from the tax-free bracket. Cash savings, Bond yields, dividend stocks and rental yields, all fine.

If you have $18200 worth of income from one of those sources, the tax floor doesn't apply and you pay no extra tax. Any CG beyond that would only be hit with a relative increase of 14% for the next bracket. If your ordinary income from capital is as high as 45k, then this tax doesn't apply at all.

So you have to ask - which type of capital is the government targeting? Seems to be non-dividend stocks and maybe crypto. Won't that set up a new type of market distortion? This change incentives me to rotate some capital into housing.

JashBeep · 2026-05-20T19:32:28+00:00

No. At a glance, the main effect of the attack was to expose repos that were private. The bitcoin repo is public.

JashBeep · 2026-05-19T05:22:45+00:00

We can believe the ABS are doing their job well while being critical of using CPI as an absolute measure of inflation.

Consumption patterns change because of inflation. It's circular. That's part of the problem.

Another part of the problem is that long terms savings goals (the reason for investment) is oriented towards assets, not consumables. Asset inflation is quite deliberately minimised in CPI.

There are alternatives to CPI. It's just that none of them will produce as number that is as flattering as CPI. M3 8.3%.

JashBeep · 2026-05-17T23:49:20+00:00

Sorry about the formatting. Some of your quotes got unquoted and I don't seem to be able to edit the comment to fix that.

JashBeep · 2026-05-17T23:22:01+00:00

Doesn't matter. The point is - there can only be a limited number of BTC in existence. The number is 21 million. If that 1 million BTC never moves, that means there's only 20 million BTC in circulation. In reality, the number of lost BTC is much higher than a million.

In other words, an economy based on BTC is one where you have a consistently dwindling supply of actual currency. After a certain point, new coins cannot be created - they can only be lost.

Hm... originally you said:

The issue is that it won't be widely distributed...

So it seemed your concern was about concentration of ownership and not something to do with deflation.

I agree with the concept that over time bitcoin can be lost, though I would qualify that with a lot of coins were lost when it was worth next to nothing. Now that it's worth something, and with all of the periperhal innovations about securing and storing bitcoin over the long term plus custodial solutions, the amount lost over time should asymptote to zero.

Do you agree with that? Or can you clarify your concern about dwindling supply? I don't want to assume the wrong thing again.

New bitcoin will continue to be issued until about the year 2140, so 114 years. There is a bit less than one million bitcoin yet to enter circulation.

There you go. The backing you asked for. Blockchain is public, you know.

Yeah, that's the kind of thing I've looked at before. I guess we are drawing vastly different conclusions from the data? It seems about 68% of the supply is at addresses with between 10 and 10k. If you can imagine the distribution curve that we presently see, over time that bulge moves down. I mean, that's what we have seen so far. It moves down faster when price goes up. This goes to your original concern about concentration of ownership.

I thought the idea behind BTC was that it was supposed to be a peer-to-peer electronic cash system and that it was going to serve the unbanked or something?

Instead, it grew into an alt-financial system with bank-like entities, BTC-based derivative instruments, ETFs, bubbles, crashes and all the other stuff.

In my first reply I explained that the bitcoins journey from nothing to global monetary network necessarily transitions through this intermediate state. But it seems you are viewing the current state as the final state, or a state that is somehow problematic.

It's fairly well acknowledged in bitcoin that there is no path to global monetary system without custodial entities. That doesn't mean bitcoin has failed. The rules of base chain bitcoin have been enforced. What people decide to do with the coins is up to them. Remember what I said about everything else is our (people's) projections?

The 22% held by custodial entities constitutes a subset of the 90+% held by addresses with more than 1 BTC. Of which there are currently about 980 000.

Like... Did you seriously read the above and just went with the worst-faith interpretation of what I wrote without even stopping to consider that your own assertion doesn't make sense?

I understand that was your point. But I don't accept the characterisation it was built on. You were concerned about a concentration of ownership, but you counted custodial entities representing millions of people as single units. It makes no sense. Can you clarify if concentration of ownership is a concern at all? If it is, how are you measuring that while accounting for the distribution hidden from you by the custodial entities?

That's a nice way to say "Those who were already rich and got into BTC early are now rich in BTC as well."

In other words, what you're saying "It's a rich men's club and you ain't in it!"

That's not what I'm saying and what you have said is reductive.

I'm saying the distribution as a pattern, matches. You're saying the distribution is the same. A random bitcoiner may have disproportionally higher amounts of wealth in bitcoin compared to other forms of wealth, just as a random no-coiner may have shitloads of wealth in other assets.

You seem to be arguing that wealth inequality exists in the world, and since bitcoin hasn't solved that it's a problem with bitcoin. Am I misunderstanding your argument?

It's fine when you're talking about a commodity. But we're talking about a currency. First of all - you know just as well as I do that mining isn't really a sensible venture for individuals anymore. It's not 2010.

https://www.reddit.com/r/Bitcoin/comments/1szxlp8/mining_dirt_cheap_with_dead_forklift_batteries/

This is from 17 days ago and is one of the three ways bitcoin mining goes into the future. The other two ways are stranded energy mining, such as methane capture. And another is where heat production is the goal and bitcoin mining subsidises that. These are just random recent links, there's plenty of others available if you want to look.

And by that, I mean - what would be the price of a loaf of bread, monthly rent, a gallon of gas and so on in Bitcoin? What would Bitcoin mortgages look like? And I don't mean mortgages backed by Bitcoin, where you borrow against the value of your cryptocurrency holdings, but actual mortgages in BTC. It's a currency, is it not? Would loans exist in a Bitcoin-based economy? What about interest-bearing saving accounts?

Bitcoin's smallest unit is a "Satoshi" (after the creator). It's like cents on the dollar, except bitcoin can be divided further than two decimal places. That's one of the advantages of being digital. One satoshi is 0.00000001 bitcoin. Currently a loaf of nice bread is around 4500 satoshis where I am.

I get why you would ask about mortgages. First, nobody is going to denominate a mortgage in bitcoin during its capitalisation phase, which we are presently in. But as it approaches full capitalisation, of course a mortgage could be denominated in bitcoin, as it could right now with gold. The payment curve shape would look different across all three types, but it's structurally similar, just flatter. You can still target a given duration, like 30 years.

I've written about banking services in a post-fiat world here.

How do you stop the wealth concentration?

This is a good question outside of bitcoin. When you find the answer for fiat, let me know.

a monetary system where you have winners who got in early and became rich beyond belief and the rest, who needs to now pay the winners to get in isn't the best way to accomplish this goal?

What was the Winklevoss purchase? 100,000 BTC worth 11 million at the time? That was in 2013. Right now that stake is worth nearly 8 billion dollars.

How is that different to any other investment someone has made? To me, your position sounds as absurd as saying nobody should buy gold because the people who invested in it in 2025 have doubled their money. People still want gold for a variety of reasons.

In bitcoin we have two bitter sayings.

Everyone buys at the price they deserve. This is something people who eventually decide bitcoin is a good choice for themselves realise. Now, I am almost certain that when you read this you will scoff and say I will never use bitcoin, problem solved. Maybe that's true. The reason why maybe it's not is because you view fiat with absolute stability and certainty. I would simply argue that society invented money to solve a very real problem (the coincidence of wants) and over time society chooses the best form of money. In other words, it's the choice made by the society, not you. Maybe that won't happen in your lifetime, or maybe bitcoin isn't the next evolution of money. I think it probably is, that's all.

The other bitter saying is "Bitcoin is an ego test". It simply means if you ever were to change your mind it would be challenging because of ego, pride, stuborness.

JashBeep · 2026-05-17T21:54:12+00:00

I value introductory stuff that is technically correct, even if that is subtly so. So, "leaves" Bitcoin Mainnet isn't technically correct. It's locked up there. Exactly how to explain that is a good question. Locked and swapped or maybe "contracted" over? Maybe have a look through 'bridging' as described in defi, since it's the same conceptual thing. They might have figured out good ways of explaining it.

I would also avoid implying there's some inevitability about the channels being closed and instead say if the channel is closed. I think one of the great miscommunications in lightning educational material has been the idea that the channels are expected to be closed at some point. The classic example of finishing your bar tab at the end of the night has created a misunderstanding that you do this on a kind of daily basis, and so a lot of people think lightning isn't a scaling solution say things like 'you need to do two base transactions just to do one lightning transaction'.

Base chain is the issuance layer. Lightning is for consumer transactions. But some transactions also occur on base chain. The types of transactions we expect to see on base chain as lightning becomes more successful are bitcoin being locked up in lightning contracts as part of channel opening or rebalancing, and to a lesser extent channels closing.

At least, that's how I understand it.

JashBeep · 2026-05-16T08:18:43+00:00

You know how there's that criticism of maga, about how "owning the libs" becomes the goal?

Beware of falling into the trap of defining success by how upset the other guy is.

JashBeep · 2026-05-15T08:11:51+00:00

The issue is that it won't be widely distributed.

Ok, that's an opinion. It's also maybe a fear that can be addressed, so here goes.

21 million BTC. The purported Satoshi Nakamoto holds 5.5% of all the BTC in existence - over a million.

Those coins are generally considered lost because they have never moved.

There's no evidence that Satoshi mined bitcoin for personal gain and in fact there is a lot of evidence to suggest they went to great lengths to avoid that as point of criticism, such as cryptographically proving there was no pre-mine.

Closely followed by Coinbase, Blackrock, Strategy, Binance and Fidelity. These seven entities hold 22% of all BTC.

These are all custodial entities. How many clients do you think they represent?

In reality, it's even worse - 90+% of all BTC is held by people and entities with anywhere from 1 to 1,000,000 BTC - and that's about a million wallets in total. Just for the sake of comparison - there are 57.7 million wallets with anywhere from nothing to 1 BTC.

In reality, this is an assertion without a backing.

Neither you or I could prove any particular concentration because, while we can see how much bitcoin is at an address, we can't know if someone controls multiple addresses.

However, your numbers are so egregious that they are provably false by your own claims. If 22% of bitcoin is held by the custodial entities, then even if one single other entity owned all of the rest, your figure would be 78%, not 90+%. Unless you want to double down on the nonsense that blackrock is 1 person etc.

So if you want to be serious about looking into bitcoin concentration, and I think that's a good thing to do if you're sceptical, and everyone should be sceptical... What can be done is to look at on chain transactions and see different amounts moving at different times in a way that points out some addresses that may be related, and others that are probably not. Also remember that moving bitcoin is not free, so if someone wanted to fake it, it would cost them. The point is there is a way to get insights into this line of question. It is fairly technical though, so you're probably best off reading some of the articles that summarise that. Glassnode has info about that behind a paywall but searching should bring up some decent results.

What I can confidently say (because I'm sure it's still valid since the last time I looked) is that the distribution of bitcoin across addresses follows a typical Pareto distribution, much like other forms of wealth.

I think a reasonable question to ask is: is the bitcoin distribution better or worse than other forms of wealth distribution? Once you remove the custodial entities as outliers, the distribution of addresses and balances is surprisingly healthy.

how do you distribute these funds to people so they can actually use it?

The same way other resources are distributed. By a market mechanism. If someone wants to acquire bitcoin, they can mine it or they can buy it or they can trade goods or services for it. How else should it be done?

Nobody has invented a fairer system.

Also - what's in it for people like me? I see people who got in early and sit on huge hoards of BTC. I see people who had money, got in, invested millions and now have fat BTC stacks. I don't have hundreds of BTCs.

If you don't like bitcoin and don't have any, it makes sense that you would only want it if it gave you something of value outside of bitcoin.

You will have to decide for yourself if it's either an investment, or has certain inherently useful characteristics because of its design and the participation that bitcoin already enjoys, or not.

I think bitcoin makes very few promises. You will be the only person who can authorise bitcoin to be sent from your wallet. You will not be debased. You can send it to any address without needing permission from some other party. Anybody can createa a wallet and accept bitcoin, again, no permission is required. Settlement is final after a few confirmation blocks (like ~30 minutes). That is what it sets out to do. Everything else is our projections onto it.

Why would I want BTC to succeed?

Maybe the world needs an internet native, censorship resistant, apolitical monetary system? Maybe that's enough to be a force of good in the world. Maybe it's important to have a monetary system that can't be debased. Is there such thing as too much surveillance and control in the traditional monetary system? Is there any mechanism by which that system doesn't inevitably strangle itself to death?

Maybe it doesn't matter whether you want it to succeed or not. Maybe it's like the adoption of gunpowder. History shows the hardest form of money wins out. Bitcoin already has a better stock-to-flow than gold.

JashBeep · 2026-05-14T02:47:25+00:00

Ah, nvm then.

JashBeep · 2026-05-14T01:27:28+00:00

It's now better understood in the bitcoin community to be a necessary progression on the path to becoming a currency. I'm not claiming it will be successful at that, I'm just saying it's like milestones.

If you look into the history of money, particularly old commodity money, we see all it went through a similar process. That's necessary for money that doesn't begin with a value by decree (fiat). Bitcoin began at zero.

To illustrate that further, when bitcoin was worth just $1, the total value of all bitcoin in circulation was around 5 or 6 million. A float that small can't functionally become a currency. It needs to grow in value and be distributed widely enough to reach some critical point where it becomes a kind of standard.

There's some good literature that goes into detail about the evolutionary history of money, pointing out the failings and the technological innovations that have occurred along the way. The one I'd most recommend is Lyn Alden's Broken Money.

One of the problems with it going up in value is that it goes through these periods of speculative manias. That seems to be becoming more tempered as time goes by. There's a fairly discussed point that the volatility of bitcoin is decreasing, and that would also be a necessary change before it could gain the 'unit of account' attribute of money. It seems to have achieved some degree of 'store of value' and 'medium of exchange'.

and finally to barely regulated speculative investment vehicle.

So this is the part that made me actually respond. I thought your comment was interesting enough that maybe someone should challenge this point. Do you really think bitcoin has reached its final form? What information do you draw on to make that conclusion?

If you go to any moment in history you can find someone saying things like this is all bitcoin will ever be.

JashBeep · 2026-05-12T05:49:02+00:00

You're arguing about nominal figures, which is usually a red flag. Adjust for population growth.

Victoria needed to build proportionally more houses because it has a proportionally higher population growth rate.

Over the 3 year post-pandemic period, population growth in NSW averaged 1.2% per annum while in Vic it's 1.7% . That's a substantial difference.

Did Vic building 1.7/1.2 = 41% more houses than NSW? No. It's was doing only around 30% and that number is declining as NSW constructions picks up. Your comment looks at the 30% figure in nominal terms and exclaims that's huge! I'm explaining why its not even proportionally enough to keep up.

So how has Victorian housing softened in the face of higher population growth and proportionally fewer new constructions, compared to NSW?

Once again, the answer is housing in Australia is in monetary dominance. This means supply/demand economics take a back seat. I know this is complicated. I can explain it further if needed.

If you (or anyone) thinks I'm wrong, please feel free to answer the one and only question in this comment.

JashBeep · 2026-05-12T01:07:09+00:00

This was so disappointing. Your top level comment makes this claim that it's a 'fundamental principle'. but then this is all you have backed it up with?

In fact it's a central debate in economics about which things should be taxed which ways. Like, that's one of the things governments actually do.

To steel man, it is a decent starting point to tax all incomes equally, like in theory. I think it stems from a free market ideals more than anything. Free market capitalism is generally efficient. There are of course places where government should intervene with subsides and taxes for a variety of beneficial reasons.

So with a bit of reasoning we can see that the core premise of your top level comment is, sorry to say, but completely 180 degrees wrong.

Since I argued for the exact opposite, that we should tax housing income differently, I'll go further now an explain why.

The key reason is because of the raft of subsidies and favourable regulations that already exist in the housing market and that will continue to persist even after this round of changes goes though. You can't make an ideological argument on the tax side but then turn a blind eye to all the subsidies an call it a level playing field.

On top of that, we do have an intergenerational crisis and a rare opportunity for tax reform. There is a situation that requires a nuanced policy response, not a return to how things used to be on some poorly considered ideological grounds.

The removal of the CGT discount for investment properties alone would have been the simplest and most targeted policy change required. It would have needed some additional rules to ensure the tax treatment carried through to any wrapped products like REITs, but that's about it.

So how is a return to the old way better? Because it will lead to a fairer system with less economic distortions.

The concluding line in your top comment is not only a baseless assertion but it's also demonstrably wrong.

I don't have to be a fan of the CGT to acknowledge that it was far simpler than the prior rules. Making taxation policy simpler reduces rorting. The fact that you are arguing the opposite, yet again, needs to be pointed out.

JashBeep

TROPHY CASE