Taxes

Tax Proposals Attempt to Bridge the “Valley of Death” for Small Research Firms

March 24, 2015
| Blogs & Op-eds

Two new tax proposals sponsored by the Coalition of Small Business Innovators promise to help small, research-intensive companies cross the “Valley of Death” by attracting investors even when they are still far from profitability. The first proposal would amend Section 382 of the Tax Code to permit passive investors to take advantage of the net operating losses and research tax credits of small research companies in which they invest. The second change would make it easier for small companies to carry net operating losses forward even as they conduct new rounds of financing. An independent study by Ernst & Young estimates that this change would increase investment in these companies by $9.2 billion, allowing them to create 47,000 jobs.

How a Knowledge Tax Credit Could Stop Decline in Corporate Training

March 9, 2015
| Blogs & Op-eds

Business investment in worker training has declined significantly in the last two decades, even as U.S. workers have faced increasing international competition. That is a big problem for American productivity and international competitiveness, writes Rob Atkinson in The Hill. To address the problem, Atkinson argues Congress should create a knowledge tax credit that provides incentives to invest in workforce training. The entire economy would benefit.

Obama Faces Business Backlash Over Cash Tax

Financial Times
President Obama's proposed budget does not effectively address high corporate tax rates.

Taxes and the Economy on the Rebound

January 31, 2015
Joe Kennedy discussed President Obama’s tax reform proposal and its potential impact on the economy on the public affairs news program Fresh Outlook.

Joe Kennedy discussed President Obama’s tax reform proposal and its potential impact on the economy on the public affairs news program Fresh Outlook.

Preempting International Harmony: The New British Tax on Overseas Profits

January 21, 2015
| Blogs & Op-eds

The UK’s new tax does try to address a real problem with the implementation of corporate taxes in the modern economy. However, a new international process led by the OECD already exists to deal with the issue. This effort recently issued a series of major reports and is scheduled to make final recommendations next year. The British government should delay implementation of its new tax so that it can act within a multilateral context designed to deal with the larger issues involved.

Boost R&D by Easing Repatriation Rules

January 12, 2015
| Blogs & Op-eds

A policy compromise that lets companies repatriate funds at a low tax rate, provided they spent at least half of these funds on research and development, would accomplish the mutual goals of freeing up foreign earnings and boosting research, while not contributing to the federal debt-to-GDP ratio.

Preempting International Harmony: The New British Tax on Overseas Profits

December 16, 2014
| Blogs & Op-eds

In today’s world, companies are moving away from fixed assets and becoming much more mobile in both their corporate structure and physical location. As companies outsource more of their activities, it will become increasingly easy for them to move the most valuable parts of their production process to low-tax jurisdictions. As a result, it will be increasingly difficult to tax corporate profits, especially when the concept of profits is becoming more difficult to define. For this reason, governments would be wiser to shift the burden of taxes more toward less mobile sources of revenue (such as consumption and property) and/or activity associated with social harms (such as greenhouse emissions and use of tobacco). The greater visibility of these taxes is actually a benefit for making better policy. 

New Evidence from Canada: Tax Policy Does Affect Research Spending

December 15, 2014
| Blogs & Op-eds

In “Do Tax Credits Affect R&D Expenditures for Small Firms? Evidence from Canada,” the authors find that firms that qualified for a larger tax credit did spend more on R&D in the following years compared to firms of similar income whose tax situation did not change. 

Choosing Growth Over Protectionism

December 12, 2014
| Blogs & Op-eds

Brazil narrowly chose to reelect President Dilma Rousseff, and now she has an important choice to make about the future of Brazil’s economy: whether to take the necessary action to get Brazil’s economy back on track. Here’s an easy place to start: eliminate all tariffs and discriminatory taxes on information and communications technology (ICT) products and services.

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