[snagage]

Being a private investor, I agree a lot with what Cuban is saying.

Strangely enough Australia, which Cuban suggests he's been investing in, has a few investor friendly (or trader unfriendly) regulations built in.

1. Hold a stock for over a year and capital gains tax is halved.

2. Tax (franking) credits are given out when dividends are paid. This stops double-taxing and encourages companies to pay dividends and investors to demand them.

3. You must hold a stock for 45 days to take advantage of the franking credits if you accumulate more than $5k worth.

[cturner]

That's a rose-tinted view. All of the things you list as investor-friendly involve exceptions whereby the government fails to swipe money from you.

The effect of policies that tax most investment scenarios is to discourage investment because it reduces your options. Consider this situation: you think that the drop in the ASX is unjustified and want to speculate on this. You're discouraged from doing it: even if you pick it right and provide liquidity when the market is dropping, they'll tax your upside when you to exit. That is, unless they sit on it for those periods, which discourages the first interaction because on that kind of trade you're not necessarily going to want liquidity tied up for a long period.

You get all the risk, but in addition the government eats into your upside.

A quirk of the Australian arrangement - non-residents aren't subject to capital gains tax. This puts them in a better position to supply liquidity in opportunity times, which some people consider the current market to be.

[westicle]

Great summary of the tax advantages available for buy and hold investors in Australia.

How would these concepts integrate with the US tax treatment of stock trading? As far as I know there is no imputation of dividends under USA tax law - capital gains tax concessions might be of some benefit to value investors.

I suspect they wouldn't alleviate Cuban's concerns over the impact of HFT and exploiting market movements. A flat tax on trades seems like a more effective way to reduce the prevalence of those practices (for better or worse).