Last week, there were rumblings from U.K. investors that a hike on carried interest taxes was all but guaranteed.

CVC publicly commented on the rumors, with CEO Rob Lucas saying “Will it influence where people want to be based? Probably. We know our people are very flexible. They can operate out of any jurisdiction effectively.”

CVC is one of the most influential buyout shops in the European region, with more than $142B AUM and a headcount of nearly 900.

The asset manager is known for its high profile investments including Lipton Tea, Spanish soccer league La Liga, and Six Nation Rugby.

The United Kingdom already suffers from stunted growth on the innovation side. It doesn’t take an Oxford economist to predict the impact increased capital gains would have on venture capital investments in the region. According to Dealroom.co, the following countries lead the world in producing unicorns ($1B+ companies):

• United States: 1,603
• China: 403
• United Kingdom: 176
• Israel: 116
• India: 110

When compared to the U.S. and China, the U.K. is operating significantly below their potential.

Another perspective that feels predictive in hindsight is a quote from Paul Graham’s blog (paulgraham.com) on “How to Make Wealth”.

“A great deal has been written about the causes of the Industrial Revolution. But surely a necessary, if not sufficient, condition was that people who made fortunes be able to enjoy them in peace. One piece of evidence is what happened to countries that tried to return to the old model, like the Soviet Union, and to a lesser extent Britain under the labor governments of the 1960s and early 1970s. Take away the incentive of wealth, and technical innovation grinds to a halt.”

Perhaps this is the final straw for a country that has been stagnant for the past few decades.