1986. Nothing like an anticipated tax increase to spur LT gains.
True. Note also, though, that the revenue for all the years listed, AFTER the tax increase to 27% remained below what the revenue was at 20% the year before the rate increase anticipation year.
People clearly "turn over" their capital investments more when the rate is low. They just sit on them when the rates are high, resulting on no tax at all. It becomes cheaper to sit on a mediocre investment and incur no tax at all rather than sell it to buy a better investment and pay the high tax rate. This also results in the preservation of mediocre companies rather than having investment flow to better companies which further reduces ordinary tax revenue, too.