Canada's capital gains tax rise will further knock productivity, say economists

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Canada's plan to raise taxes on the savings of wealthy people and corporations is likely to hold back investment, potentially adding to the productivity malaise that has held back economic growth in recent years, say economists. The annual budget proposed increasing the share of capital gains subject to taxation to two-thirds from one-half for people with annual investment profits greater than C$250,000 ($181,752) as well as for companies and trusts. Raising capital gains taxes could discourage savings, a key driver of business investment, which fell in the fourth quarter for the sixth time in the last seven quarters and has been unable to sustain a move above the 2014 peak. The new tax measure will affect 0.13% of the population and make the system more fair, according to the Liberal government of Prime Minister Justin Trudeau. However, critics argue that increasing the cost of capital is bad economic policy and will discourage risk-taking, investment, and productivity growth.

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https://ca.news.yahoo.com/canadas-capital-gains-tax-rise-180621286.html