| FEBRUARY 23, 2011 -- In late January, the National Grange joined other members of the Commodity Markets Oversight Coalition in sending a letter to Senator Ron Wyden to ask for his continued help in passing the “Stop Tax-breaks for Oil Profiteering Commodity Speculation Act,” a bill that seeks to level the playing field between speculators and end-users of commodity future markets.
Currently, speculators are able to invest in U.S. Commodities, including oil, gasoline, heating oil, wheat, soybean, cotton, and other agriculture commodities. The bill would tax gains and losses of any non-commercial commodity speculator, such as hedge funds and index investors, the same way commercial participants are taxed as if they were ordinary gains and losses. Gains and losses for non-commercial investors are currently taxed as capital gains and losses at 15 percent rather than ordinary gains and losses that commercial users must pay. Gains made on oil, refined products and agriculture commodity investments would no longer be eligible for lower capital gains rates.
The legislation would also end tax breaks that favor tax-exempt commodity investors, like pension funds or endowments, over commercial traders. At present, tax exempt organizations and funds pay no taxes on their commodity investments. This bill would require gains from any kind of commodity trading to be defined as “unrelated business taxable income” (UBTI) and taxed at the same rate as other taxable income. |
