Defending stock trading

I strongly disagree with the author's assertion about traders and capital gains in the Opinion page article "Truth About Tax Cuts," Dec. 30. I am a stockbroker; I also trade my personal portfolio.

The author states that "Capital gains on trading income contribute nothing to economic growth." On the contrary, traders provide liquidity to markets, which is the lubrication of the capitalist system. Even long-term investors sell, and it is the trader that facilitates those moves. (Try to sell and close on a house with a telephone call.)

Valuation is another function traders provide. To know what a company is worth is extremely important to bankers who may be lending money, to the tax-man assessing an estate, to workers who may be evaluating an employer, or to investors looking to see if a company is under- or overpriced.

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Finally, traders contribute their fair share to the security industry's $24 billion in revenue, which is taxed as commissions to salespeople, salaries to clerks and executives, rents to landlords, and profits to brokerage firms. David P. Tomell, Geneva, Ill.

Letters are welcome. Only a selection can be published, subject to condensation, and none acknowledged. Please address them to "Readers Write," One Norway St., Boston, MA 02115.

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