Well, well, guess what John McCain is proposing as a solution to our current economic woes. I bet you cant. I mean, it's not like it's the answer that every Republican has to any and every economic condition (good or bad) here, and probably even abroad.
Oh, wait...
Yes it is.
That's right, it's a tax cut!
Who'da thunk it?
Here's a tax proposal for you John, try this one on for size, and let's see how Wall Street reacts. It's a good one, I think, and it'll help true investment, not the used car lot/casino we call stock trading.
Currently, capital gains are taxed on a two-tier system. I could describe it, but it's easier to if you just read the Wikipedia link. I propose that instead of taxing short term capital gains as regular income, all capital gains should be taxed on a sliding scale. This sounds complex, but in our computer age it should be no more difficult than a simple program into which you put purchase date and price and sales date and price (or a plug it into a math formula - if you cant handle it, ask a high school senior). The information you need should already be available (unless you trade stock in Baghdad). Taxes would start at 50% for gains made in a short period of time (say, 5 minutes) to 0.5% for gains made in 50 years.
The point to doing this?
Everytime there's a financial meltdown, what turns out to be responsible? Speculation. Damn near everytime, even if it's not the only cause, speculation is there, fucking things up for everyone. High gas prices? The tech bubble? How much of the current mortgage crisis was caused by people flipping houses who walked away when the prices started to fall (or committed fraud before-hand, adding to the bubble before it burst), or just by people who bought more house than they could afford simply because they knew it would be more valuable in a few years. That's not investment, it's gambling.
The kind of investment that 's good for the economy is when people put capital into projects with the intention of creating something, and that takes time. Buying stocks may be a way of making money, but it's only an investment in terms of cash, it does nothing for the economy in general, unless you purchase stock at the IPO stage. The kind of investment an economy needs, especially right now, is in things that add something tangible to the economy: infrastructure, new technology, even something simple like food.
Oh, wait...
Yes it is.
That's right, it's a tax cut!
Who'da thunk it?
Here's a tax proposal for you John, try this one on for size, and let's see how Wall Street reacts. It's a good one, I think, and it'll help true investment, not the used car lot/casino we call stock trading.
Currently, capital gains are taxed on a two-tier system. I could describe it, but it's easier to if you just read the Wikipedia link. I propose that instead of taxing short term capital gains as regular income, all capital gains should be taxed on a sliding scale. This sounds complex, but in our computer age it should be no more difficult than a simple program into which you put purchase date and price and sales date and price (or a plug it into a math formula - if you cant handle it, ask a high school senior). The information you need should already be available (unless you trade stock in Baghdad). Taxes would start at 50% for gains made in a short period of time (say, 5 minutes) to 0.5% for gains made in 50 years.The point to doing this?
Everytime there's a financial meltdown, what turns out to be responsible? Speculation. Damn near everytime, even if it's not the only cause, speculation is there, fucking things up for everyone. High gas prices? The tech bubble? How much of the current mortgage crisis was caused by people flipping houses who walked away when the prices started to fall (or committed fraud before-hand, adding to the bubble before it burst), or just by people who bought more house than they could afford simply because they knew it would be more valuable in a few years. That's not investment, it's gambling.
The kind of investment that 's good for the economy is when people put capital into projects with the intention of creating something, and that takes time. Buying stocks may be a way of making money, but it's only an investment in terms of cash, it does nothing for the economy in general, unless you purchase stock at the IPO stage. The kind of investment an economy needs, especially right now, is in things that add something tangible to the economy: infrastructure, new technology, even something simple like food.
It's time for a system that rewards useful, long-term investment rather than the frantic, productless, magic act that is speculation. It'll be better for the country, even if wont be better for Wall-Street (although, long term, it'll be better for them, too).
2 comments:
Can I crosspost this one on my group blog with you as the guest writer? Proper attribution of course. :)
I have no problem with that. Traffic is always welcome.
I should say that the main point I wanted to get across (and I so often bury the main point in verbosity - like I'm doing right now) is that speculation ought to be taxed at a higher rate than long term investment - a much higher rate, since it seems to be the cause of so much trouble.
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