High-Speed Trades Hurt Investors, a Study Says

http://www.nytimes.com/2012/12/04/business/high-speed-trades-hurt-investors-a-study-says.html

---------- Forwarded message ----------
From: barry levine 
Date: Tue, Dec 4, 2012 at 7:58 AM
Subject: re: High-Speed Trades Hurt Investors, a Study Says
To: letters@nytimes.com


To the Editor: 

   In the normal course of events, potential profits on stock sales motivate investors to underwrite growth and innovation in industry.  Recently, high-speed trading has broken this system. A few computer-driven traders have found ways to realize profits on the stock market as if it were a casino, while doing nothing to drive industry. Now it emerges that--in doing so--they are undercutting the stock market's founding purpose.

    There are two ways to redress this. One is to make the capital gains tax much more sensitive to time. Let any profit on an asset held less than one hour be taxed at 95% and let that taper to the long-term capital gains rate over a year. The other is to impose a transaction fee.  Over time, the two approaches aren't very different. If the "fee" has a better chance in Congress because it's not called a "tax", let's go with that.

Barry Haskell Levine