Taxing Capital

It seems that Mittens Romney Inc has brought to the forefront a discussion about our 10 year experiment with dramatically lowered long-term capital gains tax rates and how they effect the economy.  Now, I'm not a tax policy or economic expert, but it seems to me that if, as Republicans seem to contend, lowering or eliminating the capital gains rate will have a positive impact on the economy, then the 2001 decrease in capital gains taxes should reflect that, no?

Well, they don't.  In fact, when I ran the numbers and tested the capital gains rates from 1987-2008 (the latest available for the "effective rate" I actually found there is a moderate correlation between higher capital gains rates and INCREASED employment.

Now, obviously "correlation does not equal causation," but this guy makes a pretty compelling case for why the lower tax rates might hurt the economy, rather than helping it. What this indicates to me is that, at the very least, lowering capital gains does not have a positive impact on the economy, at least in so far as it is felt by average Americans.  A lower rate may help with the accumulation and expansion of wealth among the already wealthy, but in terms of making our economy grow or prosper, the evidence just doesn't seem to be there.