Dear @Nolan, very true. I was going to make that point as well just that I wouldn’t call it speculation but short term investing. There was a time when all I could find was marginally undervalued companies and I would compound short term gains of 10%-50% sometimes several times in a single year. All these small gains if compounded regularly add up to a sizable return even after paying higher short term tax.
However, that is a lot of hard work and not very enjoyable. If feels like a job. As if you stop working you are not going to earn. Only money compounds, knowledge does not. It is also difficult to build a concentrated portfolio of marginally attractive stocks.Sometimes price would shoot up 20% in a month and suddenly the stock becomes a sell candidate.
With a 0% LTCG tax, there was enough incentive for someone to research a stock that they are willing to hold for at least a year. That incentive and resulting research actually helps an investor to become a good stock picker over time. As you said, with just 5% difference now from 15% earlier, there is less incentive for holding a stock even for a year. If something looks marginally attractive, people will buy it without much research.