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Congress should establish a patent box regime modeled after those of other nations, allowing companies in the U.S. to pay a rate of 17.5 percent on corporate income from patented products.

One of the most interesting developments in the race for global competitiveness are what as known as patent boxes. If a patent box is designed in a way that links the incentive to the conduct of R&D and/or production of the patented product in the United States it would go even further in spurring the creation and location of more innovation-based jobs in the United States. Second, a patent box would lower the effective corporate tax rate for knowledge-based firms located in the United States, making it easier for them to compete against other firms in nations providing robust innovation incentives.