Many countries incentivize business investment in research and development (R&D), intending to foster innovation. A common approach is to provide direct government funding for R&D activity. However, a significant number of jurisdictions also offers R&D tax incentives.
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Instead of such a complex and inefficient system, policymakers should move to full expensing as part of the effort to build.
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Lawmakers should recognize both the growing importance of business R&D and the need to support it through a commonsense tax policy, namely a return to full and immediate expensing for R&D.
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The tax treatment of research and development (R&D) expenses is one of the biggest issues facing Congress as the year winds down.
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Two weeks after the 2022 midterm elections, it’s becoming clearer where tax policy may be headed for the rest of the year and into 2023. In the short term, Congress must deal with tax extenders and expiring business tax provisions that may undermine the economy.
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Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.
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A border-adjusted carbon tax that uses some of the revenue for pro-investment tax reform could improve U.S. more competitiveness while also addressing concerns with a carbon tax.
29 min read
According to the corporate tax component of the 2022 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.
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The business tax changes originally introduced in the TCJA are scheduled to increase tax burdens on businesses at a time when economic headwinds and broader uncertainty are higher than they have been in decades.
12 min read
The Inflation Reduction Act primarily uses carrots, not sticks, to incentivize reductions in carbon emissions. It creates or expands tax credits for various low- or no-emission technologies, rather than imposing a generalized penalty for emissions, such as a carbon tax.
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The Inflation Reduction Act created numerous tax subsidy programs intended to accelerate the transition to a greener economy.
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Patent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP. Most commonly, eligible types of IP are patents and software copyrights. Currently, 13 of the 27 EU member states have a patent box regime.
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The Senate has begun debate on the so-called Chips bill, which would provide $52 billion in grants and $24 billion in tax credits to supposedly strengthen the production of semiconductors in the U.S.
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Policymakers should continue to focus on longer term impacts rather than emphasizing the short-term stimulus effects of tax cuts.
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While the bulk of the proposed tax increases and spending programs remain under debate, Democratic lawmakers have reportedly agreed on prescription drug pricing provisions as a starting point for a revived Build Back Better package.
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Our new analysis reviews the basic structure of carbon taxes, how they compare to the existing set of climate policies, and how they could fit into various pro-growth tax reform packages.
26 min read
Starting this year, firms must amortize their research and development (R&D) expenses over five years rather than immediately deduct them from taxable income, a policy change designed to raise federal tax revenue in the short term.
4 min read
Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code.
34 min read