Tax Reform

The President had a nice visit to the Chicago Board of Trade. The thrust of the people to accumulate wealth is in the 1) stock capital gains, 2) housing. The tax system can be improved, for long term stocks inflation should be subtracted from the capital gains calculation. If Exxon is held for 10 years, you should not tax the gains as it is in one shot. The same with housing, if tax deductions for mortgage interest or property taxes are reduced or eliminated there will be no benefit or drive to own real estate, the profits will be marginalized, so no one will trouble with ownership. Then the economy will be a stalemate because no one would want to do much. The stagnation will force a world recession, hard to climb out of it. The tax code must be relative to time, and not be cold blooded. The taxes should be smarter, to average gains and losses over multiple years, so the tax is not too high in any one year. A small investor tries to make headway in a tough environment, to weather all of the pitfalls, stock market drops, and recessions. If the tax law is not fair, then there will not be much chance for the middle class to gain ground or inch ahead. The overall nation’s economy will be better supported if the middle class has a fair tax code system.