For instance, in Quebec however, as around 90% of them fail.9 This is alone, over 22,000 opened their doors in 2020, why a dollar made this way is not the same as a despite the pandemic.5 But the business entry dollar made in a regular 9-to-5 job: the poten- rate, a standard measure of entrepreneurship, tial gains must compensate for the risks taken. [...] averaged 12.2% in 2020 across Canada, a 9% When taxation is increased, as it has been by drop since 2014.6 New businesses big and small this change in the capital gains inclusion rate, require a lot of capital in order to achieve suc- venture capitalists still face the same amount Viewpoint – Increasing the Capital Gains Inclusion Rate: A Tax Hike on Investing and Entrepreneurship of risk, but wit. [...] This can A secondary effect of increasing capital gains also negatively impact the size of the portfolio taxes is the potential delaying of sales by ven- of venture capital firms and their level of in- ture investors of exiting start-ups that have vestment in start-ups, with a higher number of grown successfully (or alternatively, that are start-up write-offs. [...] A better approach would be to will thus lead to a less fluid venture capital leave more money in the pockets of investors market, and again, eventually to less innova- and entrepreneurs, whose innovations are a tion and entrepreneurship, and less economic key to increased productivity and economic growth.15growth. [...] The MEI’s Taxation Series aims to shine a light on the fiscal policies of governments and to study their effect on economic growth and the standard of living of citizens.
- Pages
- 3
- Published in
- Canada
