As the Trump administration mulls a capital gains tax cut, a Canadian think tank says a similar move here would help finance startups.
The Fraser Institute’s new publication, Demographics and Entrepreneurship: Mitigating the Effects of an Aging Population, makes the case that lowering or eliminating capital gains taxes is the best way to encourage small business entrepreneurship and financing.
Small businesses’ preferential tax rate, which was reduced to 10% this year and will drop to 9% in 2019, discourages businesses from growing and facing the tax increase, said Douglas Cumming, professor of finance and entrepreneurship at York University’s Schulich School of Business, in a release. Cumming authored one of the book’s chapters.
Lower capital gains, on the other hand, encourage investment in startups by increasing the potential reward for investors, the books argues.
Read the full publication here.