If/when capital gains tax rates change, what will the effects be on the stock market?

Oldman answered one year ago …

I don't think it would be positive, Ethan. One way around this would be to look at MLP's that trade as Publicly Traded Partnerships (for Taxable accounts, only). I think I heard B. Obama suggesting a 28-32% LTCG rate, a few days back. Since marginal rates will be so close for most traders, I would expect the whole spectrum of qualified divs. and the disappearance of "Qualified" anything after 2010, to encourage shorter term trades for most investors in the current 28% bracket.

You'd have to look at the dividend history and track record of REIT's and relatively high dividend paying stocks (such as utilities) before 2000, and going back as far as 1968 - 1982, when there were several corrections, a bear market + Volcker's attempt to control inflation by raising the Fed Funds rate to above 12%.

The U.S. economy, oil-shocked as it was, was in much better shape with regard to the dollar's value vs. foreign currencies, and with regards to the National Debt, as a % of GDP. At that time, food and fuel represented a larger proportion of consumer spending, but here was a positive savings rate, and much less credit outstanding, particularly with consumers...but banking was a real hazardous sector.