Andrew Ross Sorkin puts Robert Green up against Warren Buffett on defending Section 1256 tax breaks.
Andrew Ross Sorkin of the New York Times interviewed me about the history and future status of lower 60/40 tax rates. Read his article “An Addition to the List of Tax Loopholes” published July 11, 2011.
Mr. Sorkin quoted me and used some content from a draft version of my blog “Are lower 60/40 tax rates on futures in jeopardy?”, which I sent to him while he worked on his article. While our articles are similar in content, we reach an opposite conclusion. Mr. Sorkin suggested adding 60/40 futures tax rates to the list of tax loopholes being bandied about by the President and Democrats in connection with the contentious debt-ceiling debate. Conversely, I’m in the Republican camp on taxes — I don’t want tax hikes now, but I support meaningful tax reform efforts.
Mr. Sorkin told me that some in Congress are looking at the Section 1256 60/40 tax rates, which implies to me they are thinking about getting rid of them. He mentioned they saw a recent CFTC report, which showed that 80 percent of trading volumes on commodities exchanges are short-term trading. Which begs question: Why do futures traders receive the 60 percent long-term capital gains benefit? The remaining 40 percent is subject to short-term capital gains rates — the higher ordinary income tax rates. Why should futures traders and commodities exchanges enjoy this tax break, when securities traders and exchanges don’t?
June 23, 2011: The New York Times published a very similar article to my blog “Who’s The AIG In This Financial Greek Tragedy?” A week before, I invited Ms. Louise Story of NYT to read my blog and pursue the story too. CNBC published this NYT story on their front page, see http://www.cnbc.com/id/43506232.
Derivatives Cloud the Possible Fallout From a Greek Default. By LOUISE STORY, Published: June 22, 2011. “It’s the $616 billion question: Does the euro crisis have a hidden A.I.G.?”