re capital gains tax increase loses money in article c j wi igk panix com eck panix com mark eckenwiler writes in apr midway uchicago edu thf midway uchicago edu sez in article apr desire wright edu demon desire wright edu not a boomer writes no i m saying any long term investor the ones likely to have large capital gains would be foolish to sell in order to avoid a tax hike that a might disappear in any given year and b be overcome in a year or two by accumlated gains to which my response is so what not all people who pay capital gains taxes are long term investors more than enough of them aren t for there to be huge blip whenever capital gains taxes get raised i never said that everyone would find this advantageous i said that more than enough would for the result to be readily noticeable and distort trends even if brett s eventual return figures were correct and they clearly weren t he d still be wrong about the cause for the blip because he fails to consider basic factors you misunderstand i m not trying to prove a cause for anything merely pointing out that ted s assertion that the blip in revenues was caused by selling to avoid the tax can t be proven as ted notes not everyone is a long term investor one might find oneself as i did in late anticipating expenses in the near term that require selling off holdings given the choice between waiting a few weeks and taking an extra tax hit or selling in december with preferential tax treatment only a fool would choose the former not disputed the fact that brett can now construct post hoc calculations of what would have been more beneficial to investors is in many respects beside the point there was plenty of money style advice given to unsophisticated investors in late to sell now and save on taxes in case anyone missed it there was no shortage of similar advice late last year in the nytimes e g even though that advice was based not on the foregone conclusion of enacted law as in but merely on the assumption that clinton would raise tax rates without capping cg taxes contrary to the current proposal it works for any situation if you believe the market is going up don t sell if believe it s not sell but then you d be selling anyways wouldn t you so where is the evidence that a large number of people suddenly decided that the higher taxes meant they should sell before the year was out there isn t any ted s saying that the increase over the previous year is proof of that proposition but i m saying you can t know that the trend of increasing capital gains revenues wouldn t account for a lot of that increase was the height of the housing boom remember people were trading up like mad it s nice to think that investors always behave in their optimal economic interest like assuming weightless ropes and frictionless pulleys though this sort of thinking often fails to describe accurately what happens in the real world indeed brett there s nothing so passionate as a vested interest disguised as an intellectual conviction sean o casey in the white plague by frank herbert
