For any stock held now or bought within the next quarter and sold after 2010, reduce the long-term capital gains tax rate from 20% to as low as 4%, using a sliding scale of 2% reductions for each year the investment was held.

This would have two major immediate effects:

• Encouraging investors to hold on to current investments for at least another two years, rather than selling to try to avoid losses as the market moves even lower.
• Encouraging investors to buy now for the long term.

The result of those effects would be to reduce selling and increase buying of stocks, thus ending the market’s slide.

The reason for the sliding scale is to make it so these incentive tax cuts don’t all expire at once, leading to massive sell-offs in a couple of years.  (The scale may need some tweaking as to rates and length of time held, but the basic principle is there.)