Raising capital gains taxes will lower the return on some types of assets, and could decrease investment. If investors decrease stock holdings, and businesses rely on financing from in-state investors, then a state’s economy could grow more slowly. But a debate on capital gains taxes in the 1980s and 1990s inspired a considerable body of research, which ultimately found that these taxes have little impact on long-term investment. Key studies demonstrated that while investors changed the timing of their actions in response to taxes, they did not significantly reduce their level of investment over the long term. Since investors’ willingness.
