Idea: Tax deduction at source on short term capital gain

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April 10th 2011

by filament
Brain-fu: 408

(92461) Tax deduction at source on short term capital gain

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The idea is to have Government/ Custodians authorized by government to buy back shares sold with short term capital gain at slightly higher than closing market price on the transaction date. Government will pay higher than the market price and give the advantage of tax deduction at source to the tax payer. This will help those tax payers who are frequent traders in stock markets, to avoid filing returns for short term capital gains. Governments will increase tax collection. Statutory tax returns filed at the end of the year by traders will exclude short term capital gains from stock market trading.

SUGGESTED FOR: Uncle Sam, Scottrade, TD Waterhouse etc.

Dedicated to: H&R block

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	by badfaith (Kent, United Kingdom) April 11th 2011 since: 03/09/2010, Brain-fu: 18970 Quite a technical idea. I have a couple of questions though... won't this reduction of taxes for the trader in the market have to be paid for by the general tax payer? By which I mean that the government/custodians, having paid over the odds for these short term capital gains have to pass on the expense to the taxpayer by having these expenses appear as an addition to federal/state taxes for all, including those who do not trade in the market? And also, won't this paying over the odds by the government hyper-inflate the market price of shares by opening the door to manipulation by unscrupulous traders who realise they can get a better price from the government at the end of the term, rather than selling to the market at usual market prices? I admit i'm not too familiar with the specifics of the mechanism you are describing here, so am happy to be corrected. could be a good idea if I am wrong in my assumptions, so I'll assume you're right and say I'll vote for it+	Report Abuse