Higher capital gains tax would mean fewer people investing in equities, since their gains would be diminished by taxation. Fewer equity buyers means lower equit

Higher capital gains tax would mean fewer people investing in equities, since their gains would be diminished by taxation. Fewer equity buyers means lower equity prices. People already in the markets must find a buyer to exit and realize those gains. There may be other factors I am missing, of course, but as Walt said: tax something if you want less of it.