Is a lower capital gains rate good for the economy?

Yes a lower capital gains tax would benefit the economy. The lower rate stimulates commerce and makes it possible to be rewarded for risk.

Presently the capital gains tax is 15% but if it goes to 25% or 35% that alone will discourage investment. If I sold investment real estate and made a profit of $50,000 I would pay out $7500 in capital gains tax but $12,500 at the 25% rate. Additionally I would be responsible for recapture on the depreciation claimed during my ownership of that property which could be another 25% of that amount.

Investors will look for other ways to use their dollars.

What do you mean by "capital gains rate" and are you sure this belongs in this category (renting and real estate)?

Perhaps you are referring to the Capital Gains Tax Rate?

Whether or not it's good for the economy depends on so many things. Your views on taxes. How the government will spend the tax money. The extent of the decrease in the tax rate.

The answer is Maybe.