I’m an accountant and have clients regularly ask me how much tax they would have to pay for a certain investment before they make a decision. It absolutely dissuades some people.
Absolutely, a change to CGT may affect the risk-return profile of individual investments and might make some unpalatable. But it wouldn’t slow or stop investing altogether. One thing that has a bigger effect would be how much spare money people have to invest, how much they earn above their costs of living.
People have a financial incentive to invest their money somewhere (stock market, bonds, businesses, property, interest-bearing bank account) because if they don’t, their money devalues. Economically speaking it doesn’t matter so much where, so long as money cycles around the country and doesn’t sit doing nothing - or leave (which is another issue with global investments). A change in CGT would have to be hugely disruptive to change that incentive.
