[TTPrograms]

1) Less upside for entrepreneurs/investors/early employees due to tax policy,

2) greater hiring/firing friction due to stronger employee protections,

3) greater fixed operating costs/overhead all around due to increased incorporation costs/bureaucratic requirements.

I don't think these things are necessarily negative, but in a world with competition between markets with high incorporation friction and low incorporation friction you'd expect entrepreneurship to concentrate in lower friction markets.

[jbay808]

I can't speak for Europe, just for Canada, but I assume that a similar dynamic might exist. "Less upside" for successful founders due to taxes is frequently cited but I seriously doubt it. Instead, less risk appetite in the investment community is far more likely. Investors offer less money, with far more strings attached, and so founders move to the US to seek better investment terms. Taxes are a distant afterthought.

[TTPrograms]

If taxes affect upside for investors (especially in large gain outcomes) then it would definitely reduce rational risk appetite.

Say it's rational for some untaxed investor to take a chance on 1% on no less than $10M return. If after taxes somewhere that turns into a $5M outcome then you would need a 2% chance for equivalent expected value.