Not only does the budget not do that, but its increase in the capital gains inclusion rate from 50 percent to 66 percent for corporations, trusts, and individuals on gains in excess of $250,000 a year is likely to make these challenges worse. [...] This very targeted measure costs only $150 million per year at the end of the budget horizon, compared to the $5 billion in revenue forecast from the increase overall. [...] But it’s essential to recognize the unique role of capital gains in fostering entrepreneurship, investment and economic growth – the very things Canada needs to focus on now. [...] Second, most of the bigger capital gains that would face the higher inclusion rate are the result of holding assets for a long time – 10, 15 or 20 years – which means much of the return merely compensates for lost purchasing power due to inflation. [...] On a practical level, the government’s decision to carve out some investments for favourable treatment adds significant complexity and, at a basic level, begs the question: What problems are we trying to solve with this tax? The government is taxing the proceeds of investment, which implies investment is a problem.
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