I think the author is making a small fallacy regarding investments. He assumes that as the capital gains tax rises, investment will fall because the investor will make less money. This seems true for small investors, who might decide to "not invest" their money, and instead find starting their own business will have a higher return than buying GOOG stock.

But if I have $1 billion to invest, then I don't have the option of "not investing" that money. It has to sit in stocks, bonds, or some other financial instrument. A higher capital gains tax may change which instruments I choose to invest in, but that money will all still be invested.

A legitimate argument against higher capital gains taxes is that really great investors (i.e. the kind you want selecting investments, such as Buffet) will have less money to invest. This would hurt the economy, unless the corresponding good caused by government spending is greater.

I think everyone would agree there is a happy equilibrium somewhere. Most rich people think it lies on the side of less taxation. Buffet, in contrast, seems to think that quality investors don't add as much value as they want to believe.