7 ms·

tax cuts instead of subsidies might do better

• abdullahkhalids 2y ago
  Interestingly, last year, Canada introduced tax credits to support the clean energy technology sector [1]. Its "total over $60 billion over the coming ten years" [1]. But there is also some actual money in the same package. So I wonder, what the thinking of the government is in deciding when tax credits and when direct subsidy. [1] https://www.canada.ca/en/environment-climate-change/news/2023/04/minister-guilbeault-highlights-the-big-five-new-clean-investment-tax-credits-in-budget-2023-to-support-sustainable-made-in-canada-clean-economy.html https://www.canada.ca/en/environment-climate-change/news/202...
  • depereo 2y ago
    Tax cuts are used more often when the government wants to see more private investment into an industry. Not really an issue with 'AI' right now. Direct subsidy is more common when the government wants to see a particular outcome; then they can more easily steer those funds to realize it.
• 1attice 2y ago
  citation needed.
• mitthrowaway2 2y ago
  I would say not necessarily cuts, but at least tax reforms to de-risk equity compensation. Canada doesn't have an 83b election equivalent, and it's easy to end up losing a lot of money through taxes on illiquid stock options that end up amounting to more than the stock options are eventually worth. An alternative, for example, would be to allow paying taxes on stock options "in-kind": have the option to give the government a share of the stock options themselves, rather than paying that percentage in dollars on a valuation that you can't actually sell them for.