Taxes

High Tech's Course Hinges on Tax Talks

San Francisco Chronicle
Rob Atkinson stresses the importance of new tax ideas like patent boxes.

The Problem With Patching Up the Tax Code

Bloomberg Businessweek
“We’re not even close” to the ideal amount of corporate R&D in the U.S., says Robert Atkinson. Throwing the R&D credit out in the name of giving the budgetary balloon more lift would inadvertently harm the economy’s growth, says Atkinson.

Comparing the 2012 Presidential Candidates’ Technology and Innovation Policies

September 12, 2012
| Reports

Despite the obligatory acknowledgment of innovation’s central role in U.S. economic growth, the 2012 campaign has not yet seen a serious conversation emerge regarding the policies sorely needed to revitalize U.S. innovation-based economic competitiveness. Moreover, rather than adopt an “all of the above” approach to innovation policy that includes corporate tax and regulatory reform as well as increased federal investment in research and development (R&D), digital infrastructure, and skills, the candidates stress policies from “each column,” with Governor Romney focusing more on the former and President Obama more on the latter. This is unfortunate. For, as we write in the book Innovation Economics: The Race for Global Advantage, U.S. policymakers need to recognize that the United States is engaged in a fierce race for innovation-based economic growth. To win this race, the United States will need to adopt a new, bipartisan Washington Innovation Consensus that places science, technology, innovation, and entrepreneurship at the center of economic policy-making and recognizes that both parties bring good ideas to the table in this regard. 

This report highlights the candidates' technology and innovation policies with the aim of amplifying the national dialogue around bolstering innovation-based economic growth. The report begins with an overview of each candidate’s general philosophy on technology, innovation, and trade policy, and then compares the candidates’ specific policy positions across 10 policy areas:

  1. Innovation and R&D
  2. Energy Innovation
  3. Tax
  4. Manufacturing
  5. Trade
  6. Education and Skills
  7. Broadband and Telecommunications
  8. Regulation
  9. Internet/Digital Economy
  10. Life Sciences and Biotechnology

The report is based on information gathered directly from the campaigns’ websites and policy documents or from media reports of statements made by the candidates. In some cases where a candidate has not articulated a specific position, the candidate’s record while in office or the position of the candidate’s party (as reflected in the Democratic or Republican party platforms) is used as a proxy.

ITIF is a non-partisan research and educational institution—a think tank—focused on innovation, productivity, and digital economy issues, and does not endorse either candidate. Rather, this report seeks to provide a factual, impartial comparison of the candidates’ technology and innovation policies.

Winning the Race 2012 Memos

September 5, 2012
| Reports

As the 2012 presidential campaign moves in the final stage, ITIF is presenting general principles and specific recommendation ideas across several policy areas we believe the next President and Congress should adopt to restore U.S. global competiveness and prosperity.

As chronicled in Innovation Economic: The Race for Global Advantage, the United States is losing its once formidable edge as an innovator. Many other nations are putting in place better tax, talent, technology and trade policies, and reaping the rewards in terms of faster growth, more jobs, and faster income growth. It’s not too late for the United States to regain its lead but it will need to act boldly and with resolve.

Week by week until the November election, the Winning the Race series will put forward creative yet pragmatic ideas in policies affecting taxes, trade, education, broadband, the digital economy, clean energy, science and technology and other areas. Taken as a whole, the series represents a new Innovation Consensus to replace the outdated Washington Consensus.

Memo One (September 3, 2012): Boosting Innovation, Competitiveness, and Productivity

Memo Two (September 10, 2012): Trade and Globalization

Memo Three (September 17, 2012): Corporate Tax

Memo Four (September 24, 2012): Digital Communication Networks

Memo Five (October 1, 2012): Traded Sector Industries

Memo Six (October 9, 2012): Digital Economy

Memo Seven (October 15, 2012): STEM Skills

Memo Eight (October 22, 2012): Clean Energy

Memo Nine (October 29, 2012): Science and Technology

Memo Ten (November 5, 2012): Overcoming the Barriers 

Complete List of Policy Recommendations: Top Policy Recommendations for the Obama Administration to Help the United States Win the Race for Global Advantage

India leads the world in R&D tax generosity for both small- and medium-sized enterprises (SMEs).

India leads the world in R&D tax generosity for both small- and medium-sized enterprises (SMEs) and large firms by allowing a 200 percent super deduction for in-house R&D expenditures, a super deduction of 125 percent to 200 percent for payments made to contractors carrying out R&D in India, and a 100 percent deduction for R&D expenses that do not otherwise qualify for the other deductions. The United States, meanwhile, has allowed to the R&D tax credit expire with uncertain chances for renewal. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012 - 9:00am - 10:30am
Cannon House Office Building
Independence Avenue and 1st Street, SE
441
Washington
District of Columbia
20003

At a time when Washington is desperate to find ways to spur economic growth and job creation, somehow one of the best tools at policymakers' disposal, the R&D tax credit, has been allowed to expire and its fate is far from certain. Against this backdrop, ITIF's forthcoming report ranks the United States 27th in terms of generosity in comparison with competing countries. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012
| Reports

With the U.S. unemployment rate stuck at over eight percent, one would expect a laser-like focus in Washington on simple tools that would increase growth. One key tool is the federal R&D tax credit: increasing the rate of the Alternative Simplified Credit (ASC) from 14 to 20 percent would increase annual GDP growth by $66 billion and create at least 162,000 jobs. Yet despite its efficacy, the United States continues to fall behind other nations in the generosity of its R&D tax incentive. Other countries, including Brazil, Canada, China, France, and India, have implemented R&D tax incentive schemes that far exceed that of the United States in generosity. In fact, in 2012, ITIF estimates that the United States ranks just 27th out of 42 countries studied in terms of R&D tax incentive generosity, down from 23rd just five years ago.

This statistic is unmistakable and troubling. The United States was first nation to realize the importance of spurring R&D through the tax code, putting in place the R&D credit in 1981. As a result, the United States experienced an R&D stimulus that helped drive robust economic growth through the 1980s and 1990s. Yet, while proposals for increasing the R&D tax credit have come and gone—including most recently President Obama’s call for a slight increase of the ASC to 17 percent—what was once the most generous R&D tax incentive in the world has now become one of the least generous. This means that when firms look for countries in which to invest in R&D, many other nations have a distinct, and in many cases, large tax advantage over the United States.

In a globalized world where innovation is the key to competitive advantage, firms within United States are less able to gain global market share in technology-based industries and new areas of growth. The result: stagnant economic growth and persistent unemployment—precisely the symptoms we see today. Without R&D tax incentives, companies will not conduct enough R&D, and thus society is worse off without R&D tax incentives.

U.S. Drops to 27th in ITIF Survey of Global R&D Tax Incentives

WASHINGTON - The United States is continuing to fall behind other countries in providing tax incentives for companies to undertake research and development, putting U.S. firms at a disadvantage in the global innovation race, according to a report released today by the Information Technology and Innovation Foundation. Read more »

We’re #27: The United States Lags Far Behind in R&D Tax Incentive Generosity

July 19, 2012
The U.S. needs to retain the R&D tax credit for innovation-based global competitiveness.

At a time when Washington is desperate to find ways to spur economic growth and job creation, somehow one of the best tools at policymakers' disposal, the R&D tax credit, has been allowed to expire and its fate is far from certain. Against this backdrop, ITIF's forthcoming report ranks the United States 27th in terms of generosity in comparison with competing countries. This is putting U.S. firms at a major disadvantage in the global innovation race. Read more »

See video
Syndicate content