WASHINGTON (Feb. 26, 2014) - In response to the release of a draft of comprehensive tax reform legislation by Congressman Dave Camp, Chair of the House Ways and Mean Committee, Robert Atkinson, President of the Information Technology and Innovation Foundation (ITIF), issues the following statement.
"ITIF commends Chairman Camp for his leadership on tax reform and his efforts to lower the corporate tax rate, but the effort should not be revenue neutral or come at the expense of pro-growth tax incentives and needs to be paid for with higher tax rates for individuals.
When looking at the impact of taxes on competitiveness and economic growth it is most important to lower not just the statutory corporate tax rate, but the effective rate as well; the one that companies actually face when deciding whether to invest in the United States or in other nations. This cannot be done if tax reform is paid for by reducing important tax incentives such as the deduction for U.S. production activities, accelerated depreciation of equipment, and, especially, the R&D tax credit. Each of these provisions lowers the cost of making investments that are pivotal to spurring productivity, innovation and competitiveness. In fact, as ITIF argued in a debate today, the R&D credit, which the proposal finally makes permanent, in particular, increases jobs and economic growth and the U.S. risks falling further behind our global competitors if we do not expand the credit. Unfortunately, by eliminating companies' ability to expense R&D costs, the proposal would raise the effective tax on research activities, putting us even further