Alberta can spur entrepreneurship by cutting personal income taxes
Source: The Fraser Institute
Authors: Ergete Ferede, Charles Lammam
Entrepreneurship remains a vital source of innovation, which helps grow economies and provide employment opportunities for Albertans. Unfortunately, several recent studies have found fewer businesses are being started in Alberta (and Canada as a whole), pointing a long-term decline in rates of entrepreneurship. This downward trend in entrepreneurship could have negative and widespread effects on Alberta’s economic well-being.
Given the current state of entrepreneurship, there’s a growing debate over how government policies affect entrepreneurship and what policies could help reverse the decline. A common focus of these debates is tax policy. Do higher personal taxes hurt entrepreneurs? If so, how much do changing tax rates affect entrepreneurship? Since Alberta has recently increased its top personal income tax rate from 10 per cent to 15 per cent, these are timely questions with real consequences for Albertans.