Lowering the capital gains rate un-locks investment and America's true economic potential. High capital gains taxes can prevent someone from selling an asset and paying the tax. This lock-in effect limits economic growth and job creation. Capital stays locked in an investment instead of being free to go to a person who wants to hire new employees in her consulting business. Lower capital gains will increase federal revenues and thus help reach the goal of a balanced budget.
History indicates that lower capital gains taxes have a positive impact on federal revenues.
Given the increases in the stock market, inflation and growth of the economy since the late 1980s, realizations and taxes paid are certainly being depressed by the current high capital gains rates. Rather than discouraging American workers and businesses, the Federal government ought to simply get out of the way. They know a lot more than the Federal government ever can or will about creating jobs and products in a competitive marketplace. I would also point out that sound tax policy and economic considerations argue for inclusion of a corporate capital gains rate reduction comparable to the percentage as individual rates are cut. History proves that capital gains tax reduction is the right course to take.