Taxes

The Corporate Tax Simplification Delusion

February 16, 2011
| Blogs & Op-eds

The Washington tax policy groupthink says that the optimal reform is to purge the federal corporate tax code of the myriad credits and deductions and then use the resulting savings to lower the rate. But this groupthink is based not on evidence, but on ideology. In fact, the dogged faith in simplicity will trump efforts to reshape the code as a driver of innovation and U.S. competitiveness, and it will result in less, not more, growth and jobs.  Instead, the tax code should focus on expanding exemptions and incentives that spur innovation and growth-enhancing activities like R&D and investments in new machinery and equipment, while eliminating ineffective ones.

Statement by ITIF President Rob Atkinson on President Obama’s Proposed Budget

When it comes to innovation and competitiveness, there is a lot to like in the President’s budget. The President deserves praise for at last pointing the country in a new direction but he must better prepare us for an arduous and uncertain journey on the road to global competitiveness and innovation.

Time for Washington to Think Like a State

February 14, 2011
| Blogs & Op-eds

For too long the conventional wisdom in Washington has held that the United States is not in competition with other nations. The neoclassical economists that dominate the debate argue that corporate tax policy reform should simply “level the playing field” and then suddenly the U.S. will thrive in the global economy. Yet the approach to tax policy would actually make our competitiveness worse. The states understand this; Washington does not. The economic policies of states are based upon the fact that a competitive corporate tax rate, particularly on “traded firms” is essential. Maybe it is time to send the DC economists for one-year stints in state government to see how the real world works.

17 is Not Enough: The Case for a More Robust R&D Tax Credit

February 8, 2011
| Reports

President Obama’s call to increase the R&D tax credit from 14 to 17 percent is an important first step in restoring America’s global innovation-based competitiveness. But if our nation is to really address the challenge—the “Sputnik moment” in the President’s words—17 percent is not enough. Increasing the Alternative Simplified Credit (ASC) from 14 to 17 percent will move the United States from 17th place amongst OECD nations to 13th—an improvement to be sure—but one that will leave the United States far behind the global frontrunners in terms of R&D tax incentives. We urge Congress to take up the President’s call to expand the credit, but expand it to at least 20 percent, as some in Congress have proposed.

Rob Atkinson on C-SPAN's "Washington Journal"

December 2, 2010
| Presentations

ITIF President Rob Atkinson discusses the research and development tax credit, innovation policy and U.S. global competitiveness during a segment of C-SPAN's Washington Journal. Tune in beginning at 9:15 a.m. on C-SPAN.

President Obama’s Accelerated Depreciation Proposal Will Boost Economic Growth

November 19, 2010
| Blogs & Op-eds

President Obama recently proposed letting companies (big and small) expense 100 percent of the cost of their equipment purchases made late this year and in 2011. It’s a good idea. It would be an even better idea if the expensing were permanent. Given the slow growth of capital equipment investment by U.S. companies, particularly manufacturers, in the last decade, the non-competitiveness of the U.S. corporate tax code, and the dramatic decline in U.S. manufacturing output and jobs (and corresponding chronic and enormous trade deficits), you’d think that both sides of the aisle would jump on this...

Congress should institute a 25 percent tax credit for company expenditures related to bringing a WTO case.

Government alone cannot fully investigate all potential WTO cases. The U.S. private sector is deeply engaged in the problems caused by unfair trade practices, while the government is a step away. Companies do not do more because they have an incentive to be “free riders”—taking advantage of cases filed by the government or prepared by other companies. Companies that do help bring cases are acting on behalf of the U.S. government. So what’s good for GM is, in this case, good for the country.