Trying to tease out the effects of market levels / "exuberance" from tax rates would be a project.

I completely agree so instead of looking for patterns in such noisy US data I prefer to look at the many natural experiments run by various governments all round the world seeking to maximize revenue that have independently come to the conclusion that higher CG rates are self-defeating. The revenue maximizing rate usually settles somewhere around 20-30% (the US is already toward the higher end of this range: 23.8 plus state tax). Now the optimal rate for the economy as a whole might be lower than this as all taxes have distortion effects but it's certainly no higher.

A more rational way to tax the wealthy would be a Swiss style wealth tax at low rates around a half of one per cent set at a local level to foster competition. Few would object to that and it would bring in a lot of revenue from currently lightly taxed sources like a lot of California RE (owned for decades by rich families).

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