Under this theory, if gross-of-tax discount rates are 10% and an investment promises $10 per year, I'll plunk down $100 for it if tax rates are zero, and $100 if tax rates are 50% and I get only $5 per year. "To be tested." Recall also, if tax rates are on nominal returns, with even moderate inflation, the tax falls on what is a compensation for inflation. The effect of higher taxes seems like an empirical question, with all due respect to both Buffett & Asness, and Richard.
I agree, it is testable. One thing that makes testing tough, though, is trying to figure out how the market discount rate change as a result of tax policy. IN any event my principal criticism of Asness is that if you are going to change the numerator, you also need to change the denominator.