first, i'll preface this recommendation by saying this is probably a terrible point to go short, and a great time to go long. evidence is pointing to a short term bottom here.
but if you're going long term short here (multi-year) i would, in agreement with the previous poster, recommend a rydex or profund leveraged account. this is because you can't lose more than your principal, and they can be further leveraged by margining them for an additional short sale after a month's time. plus holding them a year plus will let push you into the long term cap gains margin, and save you a bundle on taxes. you'll get whacked with a high mutual fund fee, but its worth it if you intend to hold for a while.
going short a futures contract will be taxed as both a short term and long term gain should you profit from this trade.
shorting the market via spyders or cubes is, in my opinion, the worst idea in terms of taxes. you'll pay always pay the high short term cap gains taxes, because you don't own the shares when you short, you borrow them.
good luck
