We keep hearing from the conservatives-libertarian that we need lower taxes on capital gains and dividends to encourage capital spending or investments. But when I look at the record of the impact of lower taxes on capital on investment I am hard pressed to see the benefits such lower taxes are suppose to deliver.
The peak was under Carter just before Reagan cut the capital gains and dividend taxes.
Clinton raises them and Bush cut them again. it sure looks like the cut in taxes lead to lower investments, not the higher investment the tax cuts were suppose to generate.
Yes, the data is nominal data. But tax rates work on decisions made on nominal dollars so looking at their impact on nominal dollars is the correct thing to do.