Washington, DC – Today the Information Technology and Innovation Foundation (ITIF) released a report examining the need to reform the U.S. corporate tax code to foster America’s global competitiveness in the new innovation economy.
In the newly released report, Effective Corporate Tax Reform in the Global Innovation Economy, ITIF President Robert Atkinson recommends the need for the fundamental reform of the U.S. corporate tax system by outlining six principles to guide corporate tax reform for the 21st century global economy:
- Principle 1: Differentiate between individual taxes and corporate taxes and focus on making the individual tax code more progressive.
- Principle 2: An effective corporate tax code is neither simple nor neutral.
- Principle 3: An effective corporate tax code should explicitly spur innovation and productivity.
- Principle 4: Nations need competitive corporate tax systems in a global economy.
- Principle 5: Tax reform should shift revenue collection from mobile sources of economic activity toward immobile ones.
- Principle 6: Recognize that international tax competition is here to stay.
Based on these principles, the report makes a number of key policy recommendations.
- Recommendation 1: Significantly Expand the Research and Development Tax Credit.
- Recommendation 2: Allow Companies to Expense in the First Year Expenditures on Capital Equipment.
- Recommendation 3: Allow Expenditures on Employe