It seems like the March 22 federal budget can’t come soon enough and anxiety may be the apt word to describe investor sentiment towards potential tax changes from the federal Liberals.
The big issue being the idea of increasing the capital gains inclusion rate, and whether it’s applied to stock gains, real estate, businesses, or other investments where a capital gains tax is applicable.
The rumour is Finance Minister Bill Morneau is looking at raising the capital gains inclusion from a half to two-thirds or three-quarters.
Critics go after this as a tax the rich, but that’s a bit simplistic as all it does is goes after the competitiveness of the Canadian business landscape.
Furthermore, it is counter intuitive to the Liberals’ initiatives looking to increase investment and innovation in this country.
That being said, looking at increased deficits, it’s very clear perceived policies to raise revenues may just trump what’s good for innovation and business investment.