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Congress should consider an Investment Tax Credit to provide a credit (at a lower rate) on all capital expenditures made above 75 percent of the base.

Congress should consider establishing an investment tax credit modeled on the Alternative Simplified R&D Credit (ASC). The ASC provides a credit of 14 percent on R&D expenditures above 50 percent of the average firm expenditures of the last three years. An Investment Tax Credit could provide a credit (at a lower rate) on all capital expenditures made above 75 percent of the base (the base would be the average expenditures on qualifying capital equipment over the last three years).