[quote=jstoesz][quote=swave]Investing should be encouraged, but gambling should not be. A variable tax rate on capital gains would have this affect. From 99% tax rate on trades made in seconds or minutes to 0% on investments that last 50 years.[/quote]
I have thought about this very hard, but this strikes me as a solution which would result in severe market imbalances. Its ripe for unintended consequences. For example, arbitrage trading is something that has problems but also has a valid place in the market.[/quote]
I don’t think the market imbalances would be severe. Arbitrage trading would still occur. It would just be much less profitable, or occur over a longer time horizon. The winner shouldn’t be the person with the biggest computer. This is a huge waste of resources both in terms of expensive computers and smart people who might invent the next great product if they couldn’t make billions on Wall Street.
