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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: c.hinton who wrote (255923)	2/4/2008 7:30:40 AM
From: Elroy	Read Replies (1) \| Respond to of 281500

Its up to you to demonstrate how short term holding is not specuation and how LT holding is of less value to society and capitalism . I would have to make that case if I were arguing LT equity gains should be taxed at higher rates than short term. I think they should be taxed equally, if at all. The rational is easy - the result to the consumer between ivestment in one stock for 14 months and trading a few times in the same 14 months is the same. If person A buys $100 of IBM, and sells it for $110 in 6 months, and then buys $110 of HPQ, and then sells it for $120 in 4 months, and uses his $120 to buy $120 of IBM again, and that IBM is worth $130 after 4 months (14 months have passsed) and he sells it, he has made $30. It's the exact same thing (to his net worth) as person B who buys $100 of IBM which becomes worth $130 after 14 months and he sells it. He also has made $30. Same timeframe, same investment, same gain. Why tax them differently? Since the gain for the two persons is the same (they both turned $100 cash into $130 cash in 14 months), the tax owed should be the same. Neither A nor B really helped or harmed society more than the other. In fact the person who traded 3 times paid more commissions so they probably helped the economy (brokerage income) more than the person who traded only once.