If there is more demand for government bonds (due to higher capital gains taxes, for example), I imagine the yields on government bonds will decrease. That woul

If there is more demand for government bonds (due to higher capital gains taxes, for example), I imagine the yields on government bonds will decrease. That would probably help the economy more than hurt it. Taxes (in general) apply to _gains_, inflation applies to _principal_. If 30-year Treasuries start paying 2%, capital gains could be taxed at 50% and people would still invest in equities just to have a shot of not having the real value of their wealth cut in half over the next 20 years. The apocalyptic vision expressed in the article (nobody will invest in bonds! and nobody will invest in stocks!) is overblown. The market will adjust to demand, and the fear of inflation will grow as bond interest rates decrease.