When Time Is Taxed: Division 296, & Unrealised Gains [Australia]

The War on Economic Dignity

In the long arc of civilization, taxation was justified as a price for order, a fee for roads, courts, and common defense. But today, it mutates. In Australia, Division 296 marks a new frontier in fiscal overreach — not a tax on wealth earned or spent, but on value merely imagined. It is no longer your income that belongs to the state, but your potential. And what greater theft is there than that of time yet lived?

Division 296, effective from July 2025, imposes a 15% tax on the increase in superannuation balances above $3 million — not based on realized profit, but on paper growth. In theory, you haven’t touched the wealth. In practice, you will be taxed for holding it. Sarah, with a $6 million superannuation balance and $650,000 in notional growth, would owe $48,750 simply because her account grew. Not through a sale. Not through a dividend. But through valuation.

This isn’t just bad policy. It’s the legal codification of uncertainty and coercion. The state now claims ownership not only of what you have, but of what might one day be. In a system that penalizes unrealised gains, the very act of holding becomes a liability. Illiquid assets like property or shares in private businesses are trapped. You cannot sell without loss. You cannot pay without pain. You are forced to bleed liquidity to satisfy a debt to a fiction.

This is taxation without transaction. And deeper still, it is a spiritual affront — a decoupling of effort from outcome. Wealth created through enterprise, stewardship, and patience is no longer yours to define. It is now tethered to political thresholds and indexed to the whims of inflation-ignorant legislation. And curiously, those thresholds are not even indexed to inflation, meaning more and more Australians will be pulled into the net as time grinds on.

The Treasury claims fairness. But fairness is not found in punishing stability, nor in penalising those who save. It is not fair to tax unspent growth. It is not just to confiscate paper promises. And it is not equitable to force retirees to sell farmland, family assets, or long-held equities to cover a levy on phantom earnings. It is, rather, a systemic confession: that the real economy has been hollowed out, and now the state must harvest illusions.

This is where Bitcoin enters — not as protest, but as refuge.

Bitcoin is the antithesis of this model. It is voluntary, borderless, and most importantly, self-sovereign. No central bank can mint more. No state can arbitrarily decree your future purchasing power. Bitcoin doesn’t inflate or defer taxation to the unborn. It cannot be printed to oblivion, nor taxed until realized. It exists outside the fiat incentives that reward consumption and punish prudence. It is money designed for ownership, not control.

As governments conflate economic potential with taxable obligation, Bitcoin becomes a philosophical anchor. A defense of property rights in a time when property is ephemeral. A hedge not just against currency debasement, but against policy debasement — the slow rot of reason beneath political convenience.

Division 296 isn’t just a tax. It is a mirror, reflecting a system that’s running out of ideas and reaching for the unreal to fund the unsustainable. It taxes tomorrow to pay for yesterday. Bitcoin, in contrast, is a ledger of truth. It says: your time, your energy, your store of value — is yours.

In an age where even your unrealised dreams are not safe from the taxman, Bitcoin is not just a currency. It is a declaration of independence.