On the surface, the growth argument against capital income taxes seems clear and compelling. And many policymakers and pundits—on both sides of the aisle—appear to regard it as common sense.A very different picture emerges, however, from the academic research on taxes and growth. Scholarly evidence on the growth argument against capital income taxation is mixed at best. Indeed, it would not be unreasonable to conclude, based on the best available theory and data, that the growth argument has no real basis.
[...] Compelling intuitions tend to melt away on close inspection, and the data tell no consistent story. When the negative growth effects of offsetting increases in labor income taxes or government borrowing are also taken into account, uncertainty begins to shade into doubt. Attempting to spur economic growth with tax preferences for capital income may be like trying to repair one side of the roof with shingles from the other.
Regarding the non-correlation between capital gains and real investment, here's an historical illustration by economist Jared Bernstein:
If it seems to your untrained eye that there is no relationship between the red and blue lines, your eye is correct.
And if you care about growing income inequality in the U.S. -- most conservatives don't -- then you must note the conclusion of Thomas Hungerford of the Congressional Research Service: "The reason income inequality has been increasing has been the rising income going to the top one percent. Most of that has come in capital gains and dividends."