Taxing Capital Gains

I'm pretty sure that I understand capital gains tax arguments in exactly the opposite way that they tend to be presented--i.e. that low cap gains tax stimulates investment thus spurring the economy. The way I see it, the higher the cap gains tax is the more an individual must invest to have the same dollar return on investment, and it is the dollar return that people want and need. The percentage is only relevant to the extent that larger percentage returns equal more dollars.

I agree much more strongly with the idea that it is largely people who live off capital gains (i.e. the rich) who want who want lower cap gains taxes, and this is because at that level of wealth, there is a pretty good chance that near 100% of wealth is already tied up in investments and that no additional diversion (or at leas not a substantial one) can be made to offset higher capital gains taxes.

Basically: higher capital gains taxes should create more investment (from working people saving for retirement), boosting the economy, and that it will come at the expense of people who are living off of capital gains.