They Think We're Stupid.

What does a Russian tsar and his ridiculous tax on facial hair have to do with the Australian government and Kamala Harris?

Read about it in full in today’s letter →

📖 ESTIMATED READ TIME: 5 minutes 45 seconds

A hairy tax.

In the late 17th century, amidst Russia's sprawling, frozen expanses, Tsar Pyotr I Alekseyevich—known to history as Peter the Great—embarked on a mission to expand and transform his empire.

His ultimate vision was to drag Russia into the modern, Westernised world. Among his many reforms, one stood out for its sheer audacity and peculiarity: the Beard Tax.

Peter's journey to this outlandish policy began during his first grand tour of Europe, where he was struck by the clean-shaven faces of Western nobility. In Russia, beards were much more than just facial hair; they were symbols of piety, tradition, and manhood, deeply rooted in the Orthodox Church's teachings. Yet Peter saw in these beards a symbol of backwardness. Upon his return, in a dramatic flair that would define his reign, he introduced the Beard Tax to Russia on September 5, 1698.

The tax itself was a spectacle of bureaucratic absurdity. Men who wished to keep their beards had to pay for the privilege, the amount varying wildly based on social status. Wealthy merchants might be forced to fork out 100 rubles a piece, while peasants could escape with a mere kopeyka (kopek) each time they entered a city.

Those who paid the tax were issued a "beard token," a copper or silver coin with an inscription that read, "The beard is a superfluous burden." This token was not just a receipt, but also a necessary shield against the Tsar's enforcers, who bizarrely roamed the streets with razors, ready to shave on the spot those who didn’t hold one.

Tsar Peter also didn’t shy away from personally enforcing his newly created laws. At a welcome-home party after his return from Europe, he shocked the nobles present by pulling out a razor and shaving the beards of his guests, setting the tone for his ludicrous campaign against facial hair.

The resistance to the Tsar’s war on facial hair was palpable. For many Russians, losing their beard was akin to having part of their soul removed by the state. Tales emerged of men who, upon being forcibly shaved, kept their beards in boxes, hoping to be buried with them in a final act of defiance against Peter's edict.

The Beard Tax might have been financially insignificant, but it was culturally monumental: a direct assault on centuries of tradition. It created a rift between those who could afford to keep their beards and those who could not, thus inadvertently highlighting divisions between classes.

Stupid taxes.

Think Peter the Great’s tax on beards was stupid?

Wait until you hear what leaders in Australia and the USA are cooking up…

We suffer under a myriad of utterly preposterous taxes in modern society. For example, how Denmark began taxing its farmers on their livestock’s farts and burps earlier this year. Or how I pay the Icelandic government for every kilometre I drive my car, even after paying taxes to buy, register, and insure it.

In my opinion, some incredibly stupid taxes. But they pale in comparison to the most braindead of them all: unrealised capital gains tax.

For the uninitiated, unrealised capital gains taxes are a type of proposed tax that would be levied on the perceived increase in an asset’s value before it’s sold. For example, if you own a home that has increased in value from $500,000 to $550,000 in a year, the government could hypothetically tax you on the $50K value they say you’ve earned, even though you didn’t actually sell your house and receive that money.

This proposed policy is so ludicrous it could only be conceived in the fever dreams of economic morons—essentially, taxing you for the potential increase in value of your assets before you've cashed in.

Imagine taxing someone's lottery ticket before the draw, or charging rent on a house you might one day buy. Or even taxing a farmer’s crop yield before he ever plants a single seed.

It's a financial fiction, a tax on dreams and hypotheticals, where the government reaches into your portfolio, not for what you've gained, but for what it imagines you might gain. It's fundamentally unjust, punishing success before it's even achieved.

Thankfully, no country on Earth enforces this kind of taxation. But that’s about to change.

On the 1st of July 2025, Australia is set to be the first nation on Earth to implement a tax on unrealised capital gains.

Initially, this will only affect superannuation (pension) funds, valued at over $3 million Australian dollars (approx $2M USD). And it won’t be an insignificant tax either, due to be set at 30%.

Across the Pacific, if Kamala Harris has her way, the United States will be next.

Harris has supported a 25% unrealised gains tax on citizens and residents with net worths of $100 million or more. However, many have heavily criticised the suggestion, including normally left-aligned billionaire Mark Cuban.

Fortunately for my American readers, this isn’t a reality yet. Though it could be if Harris becomes President.

Many will argue that, as proposed in Australia and the United States, these taxes are designed only to affect the wealthiest people in society. On this point alone, I can understand how some people buy into supporting these taxes.

But those people aren’t seeing the big picture.

Firstly, the wealthiest people in society won’t really be affected by these new taxes, as they also have the greatest means and resources to flee the country or offshore their wealth to avoid paying. This is exactly what we’re seeing in the UK right now, as a record 9,500 millionaires have left the country in the last year alone, primarily to avoid paying excess taxes and to escape their destabilising nation.

What’s more worrying, however, is that if unrealised capital gains tax becomes a thing, it’s the first step in governments normalising them before they’re levied on all of us.

Our leaders know these taxes are unpopular and controversial. So, what better way to get the population to say yes to them than by saying, “It’ll only be for the rich?”

In fact, this is exactly how US Federal income taxes were initially proposed in 1913. The government received the American people’s acceptance of them under the guise that only citizens earning over $500,000 (more than $15.8 million USD in today’s terms) would be taxed 7% on that income.

Fast-forward to today, and all residents of the United States are taxed between 10% and 37% on everything they earn.

This is always how new taxes are pushed through. First, only for a few. Then inevitably, for all. Our governments must think we’re stupid if they believe we’ll fall for it this time.

Just as the wealthiest citizens in the time of Peter the Great could pay to avoid the beard tax, so will the ultra-rich in our societies be able to pay to escape taxes on unrealised gains when they inevitably become commonplace.

For normal people who can’t, their wealth will be slowly shaved away by the authoritarian tax enforcers of today who want to claim their profits before they even materialise.

The good news is that if you’re from Australia, the United States, or elsewhere where these laws may soon apply, you can prepare to escape these taxes before they inevitably arrive.

But it may take some forward planning.

This is why I always say that the best time to start an offshoring or tax mitigation plan, or take steps to acquire a new residency or passport, is right now.

Written by Leon Hill.
Founder, Anticitizen.

This newsletter is for educational purposes, and is not financial advice. Please do your own research, and consider risks involved with investing or purchasing any asset.