We have not posted as we have been rolling off previously established positions. In the past few months we have just basically written calls against long positions. The fear is the tax regime post 12/31. Our strategy requires lost of income and short term capital gains. The tax implications are important but nothing like we are facing in 2013.
In recent history the US has taxed incomes and left wealth out of the picture. Savers could invest with modest taxation on dividends and gains. This was a substantial change from the post 1986 era. We have gotten spoiled in the past decade. What to do if rates surpass 40% on Jan. 1?
To be honest we are concerned. Politics aside we do not believe a government can tax itself into prosperity. We are not fond of the double taxation on dividends to begin with and are troubled that wealth accumulation will be reserved for only those who chase risk or legal shelters. Europe long ago, specifically Switzerland taxed wealth. The tax was in the form of low to negative interest rates. The US policies are confusing and the uncertainty is frustrating.
To add to the problems is the lack of movement by the VIX. It seems for such an uncertain time a level near 15 is too low. Confusion abounds.
We will continue to write against existing positions for the near term, meaning December, with the hope some relief will be evident.
In recent history the US has taxed incomes and left wealth out of the picture. Savers could invest with modest taxation on dividends and gains. This was a substantial change from the post 1986 era. We have gotten spoiled in the past decade. What to do if rates surpass 40% on Jan. 1?
To be honest we are concerned. Politics aside we do not believe a government can tax itself into prosperity. We are not fond of the double taxation on dividends to begin with and are troubled that wealth accumulation will be reserved for only those who chase risk or legal shelters. Europe long ago, specifically Switzerland taxed wealth. The tax was in the form of low to negative interest rates. The US policies are confusing and the uncertainty is frustrating.
To add to the problems is the lack of movement by the VIX. It seems for such an uncertain time a level near 15 is too low. Confusion abounds.
We will continue to write against existing positions for the near term, meaning December, with the hope some relief will be evident.
