> In November 1920, a reader of The Wall Street Journal identified as R.H.T. wrote in with a question. > “I do not want to sell these stocks at the present mar

> In November 1920, a reader of The Wall Street Journal identified as R.H.T. wrote in with a question. > “I do not want to sell these stocks at the present market,” wrote R.H.T. “Would it be legal for me to sell these stocks and deduct the loss from this year’s income, even though I bought them in again the same day?” Yes, the Journal responded, the transaction was permitted under the law. A long history of attempts to patch this "loophole" follows, but the really curious thing is how this is advantageous in the first place. As far as I understand it's because the tax system was developed to tax wage income, and a system to tax investment income is kind of bolted on. With wage income it makes sense to tax it yearly and there's no concept of wage losses.