>>>>>
>>>>>There are record numbers of people in the stock market right now, both individually and through retirement vehicles. If the capital gains are raised, mutual fund managers will divert their money into less taxing alternatives. This will result in less investment, leading to less capital gains revenue.
>>>>>
>>>>This is my complaint about reduced capital gains on stock transactions in general.
>>>>
>>>>If I go and buy 100 shares of WellEstablished INC, they receive a grand total of zero dollars to invest. Unless, of course, this is a new issue or an investment in GonnaZoom INC. I have (over)simply made a bet that the value of the stock will increase by more than my alternative investment options while the seller feels that his alternative options are better. But in the vast majority of stock transactions, not a dime reaches the actual company.
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>>>The company is itself a stockholder. Each transaction affects the overall value of the company.
>>
>>No it doesn't. It affects the share price - which is not the same thing except as it affects treasury stock. But if I buy 100 shares from you, not a single dime goes to the company.
>
>No part of the transaction goes to the company, but the company is affected by the transaction. The change of value of the stock affects the company directly depending on how much stock the company holds. It also affects it indirectly in regards to fundamentals like p/e ratios and other correlations between stock price and performance, which directly affect future transactions of company stock. This says nothing of the premiums paid on options the company writes, loan rates, interest payments and hundreds of other things that are directly related to the value and performance of the company which is directly tied to its stock price. The stock market is not gambling to informed investors, both technical and fundamental alike.
>
>>>
>>>>If I buy a "used" house and sell it later for a profit I have not contributed to the economy (with the exception of how I use the profit).
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>>>Unless you're in the business, you've contributed to a realtor, a title company, an assessor, an inspector, a bank/loan institution plus the costs of any improvements you made to increase the value.
>>>
>>
>>I buy an antique desk from you. The antiques market skyrockets and you later decide that you want it back and pay me twice what I paid you.
>>
>>You sell me 100 shares of stock. The company's profit skyrockets and you later decide to buy back the stock and pay me twice what I paid you. The improved performance of the company is in no way related to our transaction.
>
>No wonder you think its gambling. If I'm buying the stock back from you at 2x what I sold it to you for, you can be damn certain that there is either a performance or technically related reason I'm doing so.
>

If you take away the thrill factor, gambling is ultimately a series of risk-reward decisions. That's what makes craps or blackjack a silly gamble (you CAN'T beat the math in the long haul) whereas poker and sports betting are games of skill where you can actually put yourself in a position of positive expectation by analyzing the risks/rewards better than the other players in the game. I put stock trading in that same category. Your analysis as to the future value of the stock may be better than mine and you deserve your profit.


>Lets say the company holds 200,000,000 public shares of itself and the price skyrockets to 2x what I sold it for. Do you really think the value of those 200,000,000 shares is not important to the company's bottom line? To its lendors? Shareholders? Fund managers?
>
Sure it's important. But the price didn't skyrocket because you bought the stock. It went up for any number of reasons (perhaps even involving good management). The fact that is that you exercised good judgement in buying the stock. But why should that good judgement be rewarded with a different tax rate?

Putting it another way......If I buy a car from GM, a refrigerator from Maytag, or a box of cookies from Nabisco I have contributed in a more concrete way to their bottom lines than if I buy their stock. At least they receive the revenue from the sale. When you buy the stock they get nothing. When you sell the stock they get nothing. Why do you deserve a tax break for them when they get nothing out of it? Your profit came from being able to analyze better than I did. Not all that difficult and hardly worthy of a tax break.



>>Why should the profit from the second transaction be treated differently than from the first?
>
>I agree, we should lower or get rid of the income tax.

Come on......that's ingenuous at best. Getting rid of the tax entirely is a different question. Given that there is a tax, what's the justification for a different tax rate?