As soon as this passes, I'll be daytrading like no tomorrow (and I'd really like a tomorrow, thanks) in my non-retirement brokerage account. Until then, though, it's all cash. You hear me, Congress?

Obama is thinking about taxing health care benefits and you actually believe he and the Democratic-controlled Congress would put a moratorium on all capital gains for investment purchases through 2009? Interesting idea, but never going to happen.

Also, this idea is more kicking the can down the road instead of addressing the problem. Sure, this would jumpstart investment in 2009, but it doesn't fix the fundamental issues we currently have in the economy for 2010 and beyond ... and in order to fund the lost tax revenues and epic deficit for 2009/2010, Obama and Co. would simply look to raise capital gains to punishing levels in future years ... cause they aren't cutting spending (which is one of the fundamental flaws that this doesn't address).

Love your commentary Karl, but this idea would just blow another bubble (by simply expanding the air being contributed to the government debt bubble we're currently blowing).

KD wrote..

We currently have a crisis of confidence. To fix it you can either lock up all the fraudsters or you can put raw, red meat in front of the tiger - that is, crank up the "greed" dial.

The former is hard, the latter is easy.

...

You want to fix the capital markets?

That would do it.

(Yes, it would hit cap gains tax receipts in forward years, but hopefully economic growth would cover the shortfall.

Woo Hoo! We don't have to get rid of the Bezzle like you've been harping on the past two weeks or "else we'll have a depression worse than the 30's'"!!!!

One little change in the law for a year will fix the capital markets!!!

And all those people jumping into the market won't lose their money this time! Woo hoo!

I love these easy fixes.

Gen:
Why exclude real estate?
Wouldn't it be a good idea to at least get the "existing" houses off the market?
Would encourage investment in real property...
I know, given the way things are in my crappy market (Las Vegas) that if I had the opportunity to buy a larger home and rent this one out without paying CG's on the profit down the road, it might be enough to push me over the edge and go for it.
Just a thought.

I didn't say it would fix the bezzle.

It WOULD, however, clear the asset markets IMMEDIATELY.

A political impossibility. The Democrats constituency would be livid.

Karl has given up being a Jedi - messing around with the Hut @GS doesn't pay, huh !!!! He's now apprenticing Sith !!

So what was the big deal about wrong and right, impeachment, fraud and all of that?

Wisc-xc wrote..

A political impossibility. The Democrats constituency would be livid.

Why? With all the "new growth" this would cause, we wouldn't need to worry about borrowing from the bond market, we will be rolling in new taxes for all the new Democratic programs! And there is plenty of side-line cash to fund both the Treasury market, stock market, and asset markets!

We've seen in the past where government took people's property and gold, without recourse or equivalent value provided in return for government's benefit. We've seen price controls imposed in the past for govt's benefit. We've seen recently the government change all these various rules midstream for it's benefit. We hear them talking about changing even more for it's benefit. We worry about it changing rules about IRAs 401ks, pensions, and social security for it's benefit. But assume that if it made a rule that there would be no capital gains ever, that one rule would never change?

Mtgspy wrote..

Karl has given up being a Jedi - messing around with the Hut @GS doesn't pay, huh !!!! He's now apprenticing Sith !!

He might just have a raging, delirious fever today.

Martin:
Good point, I have to admit.

Bdh,

It doesn't fit the class warfare meme that got the vast majority of them elected by their BASE. I think it would be political suicide.

Heh heh.... this is just amplification of what a BIRDY tweeted in my ear ALREADY being talked about up on The Hill....

Trust me, if this gets any sort of REAL mention in the press...

Wisc, I was being sarcastic, if you couldn't tell.

Quote:

clear the asset markets IMMEDIATELY

How does it clear the asset markets? Not sure I follow. Are you meaning that private investors would be willing to buy overpriced, non-performing assets simply because there would be no future capital gains risk ... even though it might require 100+ years of possession for any real* ROI on these assets?

And to Martin's point, with the way our government is moving to abrogate "contract law" on executive bonus/compensation contracts and forced mortgage cramdown/restructuring provisions ... you think private investors would believe that the government wouldn't go back on a lifetime ban of capital gains taxes for any asset purchase in 2009 ... by say, 3rd quarter 2010 when the government requires more funding ...


Real* - As in economic REAL ... cause inflation is going to be a bigger bitch than First Lady Worf in a few years.

Karl, Great idea. But, sorry this will never happen. Obama has clearly expressed his disdain at the importance of private equity ownership. His agenda is about taking private ownership AWAY and discouraging it through higher taxes, not increasing private equity ownership or providing tax benefits for participating in the markets.

singapore has no capital gains tax. real estate, stocks, etc. mostly consumption taxes. they built their system by study the big countries and how they do it. ended up with the best of the best. They control consumer prices by importing from the cheapest countries. e.g. give up new zealand beef for beef from brazil, veggies from vietnam instead of malaysia. so many ways to bring down costs there. Also import labor from india, thailand, vietnam, indonesia, china, etc.

Azbob:
RE: "Consumption tax".
Sounds like the "Fair Tax" to me.
If so, I'm game...

Azbob, please.

Singapore is country created by the epic rich of Indonesia and Malaysia to hide their corruption money out to prepare for the 30-yr event, when the debt reset and mass murders occur before coming back for the next cycle.

There is nothing "good" if you are a "true" singaporean other than cheap labor living in a sea of rich foreigners. LOL.

Mtgspy:
Been to your site as well, good stuff.

As I said in the other thread, I get this from a political perspective, but as I said in this thread, it sort of ends the go get the bad guys for what they have done.

That sort of ends and moral standing, no?

I know, the world only ends once and I don't want it to right now but doesn't this sort of restart the old cycle? And what happens to those losses that must be accounted for?

The second question I ask b/c that I can't account for.

what happens to the value of those assets on January 1, 2010 when the incentive to buy is gone? Aren't we back right where we started with another crash?

It seems to me, if I was to buy, say a house, i would be incentivised to do a flip. Buy as soon as possible and then sell in December to capitalize on the probable highest price I could get for that asset before the incentive is gone. Sell when everyone is scambling for any asset to get in before the "Deadline"

no?