The conclusions in the "End of Era" paper are easy to refute. When you make a sweeping statement like "low corporate tax rates are what led to excess stock market returns", then a single counter-example disproves the thesis.

Let's look at the 10-year period before corporate taxes were slashed to 34% by the Tax Reform Act of 1986. During this period, where corporate taxes were as high as 48%, investors enjoyed a CAGR of 17.6%

Annual S&P 500 returns during high-tax period.
1976: 23.84%
1977: -7.18%
1978: 6.56%
1979: 18.44%
1980: 32.42%
1981: -4.91%
1982: 21.55%
1983: 22.56%
1984: 6.27%
1985: 31.73%
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CAGR: 17.6%

Now, let's look at S&P 500 returns during the 10-year period after Reagan's Tax Reform Act of 1986 slashed the top rate from 48% to 34%.

Annual S&P 500 returns during low-tax period.
1986	18.67
1987	5.25
1988	16.61
1989	31.69
1990	-3.10
1991	30.47
1992	7.62
1993	10.08
1994	1.32
1995	37.58
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CAGR: 12.4%

The fact that investors during the lower taxes period experienced a far lower return (12.4%) than those in the high tax period disproves Smolyansky's thesis. Note also that the lower taxes period featured the October 1987 market crash (worst single-day crash in market history) and the 1990 bear market.

The relationship between corporate tax rates and stock market returns is complex and often debated, with no clear-cut answer. While a simple assumption might be that higher taxes would directly harm companies and decrease stock prices, the reality is far more nuanced. For example, increased tax revenue could be used by the government to stimulate the economy through infrastructure projects or social programs. This could potentially benefit certain sectors and overall economic growth, indirectly impacting stock market performance.

The other often-neglected factor in stock market returns is investor sentiment. We've all seen periods where there is bad news on earnings, yet the market "shrugs it off", and other periods where even great news on earnings is not enough for vicious sell-offs. This is why its so hard to show correlations between stock market returns and macro-economic factors. The stock market is not the economy.

The best thing to do, if you are a GenX-er, Millenial, or GenZ-er in your wealth-building years, and lucky enough to have a job with a 401K plan, and 10 or more years to go before retirement or a big expense like funding college, is to live frugally, save 10% of your paycheck automatically into an index fund every month, and focus on your career rather than the stock market. It's the best way to achieve your retirement goals.