Taxes

Businesses Wonder How Much Tax Breaks Will Help

National Public Radio
ITIF President Rob Atkinson explains how President Obama's proposed changes to the R&D tax credit would encourage corporate innovation and create thousands of jobs.

Statement by Robert Atkinson on the President's Plan to Make Permanent the R&D Tax Credit

 

“It is welcome news that President Obama will ask Congress to expand and make the research and development (R&D) tax credit permanent. This will better enable the U.S. compete globally and make it clear that the United States has finally gotten off the sidelines in the fight for global economic competitiveness. Read more »

Statement by ITIF Senior Analyst Daniel Castro on New Internet Sales Tax Legislation

For Immediate Release July 6, 2010

For More information: Steve Norton (202) 626-5758 snorton@itif.org Read more »

Closing the E-Commerce Sales Tax Loophole

May 25, 2010
| Reports

For more than a decade states have pushed for the right to tax online sales. However, before allowing states to tax online sales, Congress should first require states to make permanent the ban on Internet access taxes and eliminate protectionist laws limiting e-commerce. Linking the rights of states to collect tax on Internet sales to the elimination of protectionist laws and discriminatory taxes on Internet access is likely to be a net benefit for consumers, as the additional taxes consumers would pay could be offset by savings from purchasing lower-cost goods and services online.

Create Jobs by Expanding the R&D Tax Credit

January 26, 2010
| Reports

A new ITIF report makes a compelling case that expanding the federal research and development tax credit would help create 162,000 jobs in the near term and enhance the nation’s long-term economic competitiveness.

Expanding the Alternative Simplified Credit (ASC) for research and development from 14 to 20 percent would spur badly needed job creation and get the country back on par with other industrialized countries’ R&D credits.

In particular, the report models the impact of expanding the ASC on jobs and other economic factors and finds that an expansion would create a number of critical economic benefits:

  • 162,000 jobs in the near term
  • A $90 billion increase in the GDP as the nation struggles through economic recovery
  • 3,850 new American patents as nations compete for dominance in tomorrow’s technologies
    The report also contrasts U.S. policy to incentivize private sector investment in R&D and experimentation with that of other leading industrial nations.
  • The U.S. is 17th among OECD countries in terms of R&D tax credit generosity.
  • Increasing the current credit to 20 percent would move the U.S. up to just 10th place.

The United States was a pioneer in using the R&D credit. Companies, workers and consumers will benefit from expanding a policy that has been shown by a wide range of scholarly research to work. Congress and the Administration should embrace this proposal an element of sustained economic recovery.


*This report was revised in August 2010 to reflect the fact that the estimated increase in economic output possible by raising the R&D credit to 20 percent was lower than originally calculated. Net tax revenues to the federal government would be roughly even after 15 years, rather than in the initial few years after boosting the credit.