By John Fout (The Street.com)

I recently received an email from a reader expressing concern over Sen. Barack Obama's (D., Ill.) plan to hike the capital gains tax -- perhaps as high as 28%. This reader wrote: "Obama's capital gains tax hike will hurt ALL of the stock market/investment -- and that means the value of your IRA will go down."

Some Wall Street pundits agree with this reader's thinking. CNBC's Charlie Gasparino, in a New York Post column titled "Wall St. Death Wish," wrote:

"Still, it's hard to see how a President Obama would be good for Wall Street. He wants to raise the capital-gains tax to a whopping 28 from the current 15 percent. That'd be great for the tax-shelter business, but stocks would tank."

There you have it -- a call for an Obama crash. Sell the calls and buy the puts, everyone.

Gasparino predicates some of this theory on the investment returns during Bill Clinton's presidency, particularly his first three years in office. In Clinton's first year in the White House -- 1993 -- the Dow Jones Industrial Average ended up 453 points, a 13.7% gain. His second year saw a nearly flat market, up just 2.1%. In his third year, the Dow exploded to the upside, adding 1282 points for a 33.5% gain. The last year of his first term -- 1996 -- saw a 26% rise in the Dow Industrials. Those are very good rates of return over a four-year period.

Clearly, 1994 was the worst year for the market under Clinton's first term. Chip Hanlon, president of Delta Global Advisers and a RealMoney.com contributor, remembers the market. He recalls, "1994 was a really difficult year for the stock market, and the bond market got killed. The market suffered under the effect of higher taxes and the specter of Hillarycare."

All of that may or may not be true. The bond market also has a tendency to overreact , which it did following interest-rate hikes from then-Federal Reserve Chairman Alan Greenspan, who started raising rates in February 1994. Many hedge funds were overleveraged and took billions in losses.

The market recovered nicely after 1994. Hanlon, along with quite a few Republicans, attribute this to the ascension of a Republican majority in Congress. I'm not so sure. "Hillarycare" died during a Democratic Congress in 1994. Furthermore, Bill Clinton facilitated the approval of North American Free Trade Agreement (NAFTA) and welfare reform -- two Republican issues.

Nevertheless, Clinton left office at the close of his second term with the Dow having closed 2000 at 10,788 -- about 700 points from where it trades today. Overall, investors fared very well under his tenure.

Same Prediction, New Candidate

Pundits in 1992 made some of the same predictions about Clinton's presidency as they are now making about a potential Obama win. One headline in 1992 read, "Experts Agree Clinton Win Means Sell Off." The article opined: "If he [Clinton] wins big, it is entirely likely that stocks could drop as much as 15 percent." It never happened.

Jeffrey Miller, president of New Arc Investments and a RealMoney.com contributor, brings us back to reality on higher taxes. In an email about Obama's agenda, Miller wrote:

First, he [Obama] cannot change the rate without legislation. He and the Congress will be confronted with the expiration of the various cuts in 2010. Any program before then will require bipartisan support. The threat from the expiration may move some to compromise.

Miller believes the Bush tax cuts will expire no matter what, because of a Democratic Congress. So, tax rates would go higher. Do investors decide to sell in order to book their gains and what would they do with the money? Putting money under the mattress won't get the historical returns of the stock market. Says Miller:

But let us suppose that he [Obama] gets an increase to 20%. While there is economic debate, I think the consensus is that there are two effects. If you had a gain on something you were thinking of selling, you would take it before the change. This is a one-time effect. The permanent effect is to change the relative attractiveness of the assets involved. 20% is still a low rate from a historical perspective, so I don't expect investors to choose a mattress instead.

The future under either an Obama or John McCain (R., Ariz.) presidency remains unclear. But it's important to note that investors would not sell willy-nilly if Obama were to win the election. Don't bet on the Obama crash.