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BAR[_2_]

In article ,
says...

On Mon, 13 Jun 2011 19:57:36 -0400, BAR wrote:

I did hear one idea on capital gains that sounded interesting. Tie the
tax discount more closely to how long the investment was held.
You wouldn't get the full tax break until it was held 5 years and make
it a higher percentage ending at the regular income rate at 1 or 2
years.
That would encourage more long term investment.
I think I would but an extra tax on any financial instrument that was
kept less than a month to make flash trading less attractive.

The more the money moves through the economy the better off the economy
is. If I have to wait 5 years to get the full tax benefit then the money
becomes stagnant and it doesn't help any one.

The idea of the stock market has historically been a way for people to
inject capital into industries and the money is supposed to be made by
operating that industry. The stock holder gets paid in dividends from
the profits of that industry. When it degraded to the idea of money
simply making money, the model breaks down and you get bubble/bust
stock cycles. It also does nothing to provide jobs for anyone but the
guys who empty the shredder baskets at the hedge funds to hide their
frauds.

The problem is that the 5 year and 10 year business plans went out the
window we quarterly results were the measure of a company's success.

Also, most companies do not pay dividends once they become profitable.
They rely upon the appreciation of their stock price to attract
investors who are purchasing shares that insiders are selling or
secondary and tertiary offerings. Why pay a dividend when I can offer 10
million shares to the public and keep all of my operating profits.