It’s sometimes tough to find silver linings in every cloud, but one small mercy of the Pre-Budget Report was that it did not raise Capital Gains Tax. Before Alistair Darling’s speech, there was much speculation that CGT was sure to go up as part of the government’s ‘soak the rich’ offensive. Some commentators were suggesting a new rate of 30 percent (up from 18 percent now) or even 40 percent. In the end, the Chancellor left CGT unchanged. He was right to do so. ASI research (admittedly a bit out of date now, but I doubt things have changed much) has suggested that the revenue-maximizing CGT rate is somewhere around 15 percent, while the growth-maximizing rate is significantly lower. In other words, raising CGT too high would hit revenues, because people react by making fewer investments, while also damaging prospects for economic growth. There may be a case for aligning CGT and income tax as part of a comprehensive overhaul of the tax system, involving much lower and flatter rates, but hiking CGT to score a political point would have been pure folly. Kudos to Darling for resisting the temptation.