The other day, we highlighted a piece by Jeff Yass and Steve Moore in the Wall Street Journal, urging Trump to index the 23.8% capital gains tax for inflation. We noted this would RAISE revenue for the government and free up housing for young people to buy homes at affordable prices. As evidence, we noted that every time the capital gains tax has been cut, there has been an “unlocking effect” where investors sell their assets to take advantage of the lower tax penalty.

We were attacked for this claim, so we wish to provide the evidence below from Laffer Associates: When the rate goes down, capital is freed up, there are more asset sales, and federal revenues go up.  See for yourself.