Opinion: Capital gains tax hikes are terrible optics for Canada The proposed inclusion rate increase should be debated, but what's more important is the anti-growth narrative

Dated: May 20 2024

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Greetings everyone, Anahid here.

I'd like to share a brief overview of an article I came across in Financial Post titled "Opinion: Capital gains tax hikes are terrible optics for Canada
The proposed inclusion rate increase should be debated, but what's more important is the anti-growth narrative".  Enjoy the read.

The recent increase in capital gains tax in Canada has sparked debate between supporters, who argue it won't impede innovation, and critics, including notable figures, who warn of its potential negative impact on economic growth and talent retention, exacerbating concerns about Canada's tax competitiveness and prompting some innovators to consider relocating outside the country.
The recent announcement by Finance Minister Chrystia Freeland regarding an increase in capital gains tax has prompted extensive analysis of its impact on individuals rather than on fostering economic growth. While supporters argue that the hike won't hinder innovation or entrepreneurship, citing past tax cuts in 1999, critics including notable figures like Kathleen Ross, Bill Morneau, and Tobi Lütke, caution that it could impede economic growth, productivity, and innovation. The concern is amplified by over 2,000 CEOs, tech managers, and entrepreneurs who signed an open letter expressing similar worries, highlighting the interconnectedness of global economies.

Critics emphasize that in today's global economy, talent and investment are highly sought after, and imposing new taxes could deter businesses and innovation. Canada already has one of the highest combined business income tax rates among OECD countries, making it less tax-competitive compared to others like the United States and the United Kingdom. A survey conducted post-budget by innovation hubs reveals that a significant portion of startup leaders are considering relocating outside Canada or moving their headquarters, citing concerns about the capital gains tax hike deterring investment, innovation, and job creation.

As discussions delve into specifics and arguments about exemptions, Canadian innovators are left contemplating opportunities elsewhere, contributing to a narrative of stifled growth and limited investment. Despite the importance of details, the overarching story matters more, and the current narrative is one that risks hindering economic progress rather than fostering it.
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Anahid Shahmoradi

Your Dreams, My Dedication - Real Estate With Compassion and ResultsWith a wealth of knowledge in real estate and home staging, I specialize in helping buyers and sellers navigate the Alberta real est....

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