[quote=ucodegen][quote=CA renter]There is no reason for profits from speculation by the rich to be taxed less than the labor of the working class.[/quote]
While I may not disagree with the rest of your statements, this is inaccurate. Capital gains on commodities are taxed as income. What is really happening right now is the ‘pile on’ effect, where money managers not wanting to be left behind, pile on. The problem with the money managers is that they don’t want to take a risk in being different. If they fail as a member of a group, their jobs are safer than if they step out and thought originally. If they fail and did so because they ‘stepped out’ of what all the money managers do.. their goose may be cooked.[/quote]
Right, I agree WRT the money managers, but other things are amiss, as well.
Regarding taxation on commodities, what about ETFs? Long-term futures? I honestly don’t know about the tax treatment on these things.
I do know someone with a lot of experience in commodities trading, and they are heavily leveraged in very, very large positions at this point in time. This person has no use for the commodity being traded. It is all speculation.
Nonetheless, speculation is often taxed more favorably than labor, and that’s what I have a problem with WRT taxes.
As far as speculation goes, too many people confuse speculation with real “investing.” IMHO, real investing happens on the supply side of things — investing in new companies and technologies, or expanding existing facilities in order to provide for growing demand, etc. When speculators “invest” on the demand side by *buying goods* with the hope of selling them at a higher price to real, organic buyers/end-users in the future (or to remove inventory of goods from the market so that people who really need the goods are forced to overpay or rent from the speculators), that is totally unproductive speculation, NOT “investing,” and that is what I have a problem with.
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Futures trading increased 35 percent last year to 11.2 billion contracts while options trading rose 16 percent to 11.1 billion, according to WFE. Volume was 17.8 billion in 2009, WFE said.
De Schutter argued that the advent of hedge funds and pensions funds through commodity market indices had skewed agricultural commodity trading, making markets volatile and increasingly detaching them from the physical state of food supply and demand.
“It is now resulting in a speculative bubble that is artificially inflating the price of food commodities,” De Schutter explained.
