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Research and Development (R&D)

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expensing infrastructure Who bears the burden of corporate taxes? Learn more about who bears the burden of the corporate income tax (who actually pays corporate taxes) and the corporate tax burden

Expensing Is Infrastructure, Too

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be complementary to the goals of infrastructure spending.

5 min read
intellectual property tax ip assets into the u.s r&d spending by the pharmaceutical industry CBO Report on R&D and Tax Policy in the Pharmaceutical Industry

CBO Report on R&D and Tax Policy in the Pharmaceutical Industry

In a new report, the Congressional Budget Office (CBO) analyzes federal policies that influence R&D spending in the pharmaceutical industry. The report highlights how taxes affect R&D investment incentives, underscoring the importance of structuring the tax code so that it is not biased against investment.

4 min read
Wyden 199a pass-through deduction proposal Democrats proposed to expand child tax credit as part of covid relief package. Analysis of the “SALT Act” state and local tax deduction cap, Restoring Tax Fairness to States and Localities Act, SALT cap repeal, eliminate SALT cap

Tax Policy Ideas in the Republican Study Committee Budget

While much of the tax policy now under debate aims to increase the tax burden on businesses, several policies in the newly released Republican Study Committee (RSC) budget for Fiscal Year 2022 focus on reducing the tax code’s barriers to investment and saving.

3 min read
Business tax hikes Some Corporations Pay Zero Federal Income Taxes—and That Is Not a Problem Democrats child tax credit plan. tax administration issues, tax complexity cares act. trump tax cuts who benefited taxpayer subsidies for drug ads

Denying Deductions for Pharma Ads Is Bad Tax Policy

The “End Taxpayer Subsidies for Drug Ads Act” would prohibit companies from deducting the costs of prescription drug advertisements directed at the public. However, the bill’s title is a misnomer: the deduction is not a tax subsidy.

2 min read
intellectual property IP tax GILTI FDII global minimum tax Biden tax patent boxes impact business, patent boxes, software, intellectual property tax

The Balancing Act of GILTI and FDII

The tax treatment of intangible assets has come into the spotlight recently with the Biden administration proposing to undo a policy adopted in 2017 to encourage intellectual property (IP) to be located in the U.S.

6 min read
R&D tax credit, Research and development tax credit, R&D amortization, federal research and development tax treatment, Reviewing the Federal Tax Treatment of Research & Development Expenses

How Should R&D Be Taxed?

R&D is more important than ever as pharmaceutical companies and governments around the world invest in coronavirus research and supply chains. But are the policies currently on the books—the R&D credit and immediate deduction for R&D expenses—the best way to encourage innovation?

EU tax research The European Commission and the Taxation of the Digital Economy EU digital levy

The European Commission and the Taxation of the Digital Economy

The consultation on the EU’s digital levy provides an opportunity for policymakers and taxpayers to reflect on the underlying issues of digital taxation and potential consequences from a digital levy. Unless the EU digital levy is designed with an OECD agreement in mind, it is likely to cause more uncertainty in cross-border tax policy.

12 min read

Poland Borrows an Idea from Estonia’s Tax System, but Misses the Point

It’s important for Poland to understand the main lesson of the Estonian approach: taxes should be designed with an overarching approach to maximize neutrality and minimize complexity and distortions. Instead of simply adopting a preference for small businesses, the Polish government should instead overhaul its corporate tax rules and truly adopt the Estonian approach to taxation.

2 min read
Permanent Build Back Better middle class tax hike Tax Cuts and Jobs Act, Tax Reform

Outlining a Path for Tax Policy Compromises

While a sweeping tax policy bill is unlikely in the near future, lawmakers may be able to come together on a smaller scale. Pairing better cost recovery on a permanent basis with support for vulnerable households as well as additional pandemic-related relief would help promote a more rapid return to growth and help businesses and households weather the ongoing crisis.

4 min read
patent box regimes, European intellectual property tax, IP, patent box regimes, IP regimes, licensing

Patent Box Regimes in Europe, 2020

Patent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP.

4 min read
Increasing the Tax Burden on Capital Investment and Automation Hurts Workers, taxing automation, use of robots and automation

Increasing the Tax Burden on Capital Investment and Automation Hurts Workers

There has been an ongoing debate about how automation and the use of robots in the workplace has impacted workers’ wages and employment. Recently, MIT and Boston University economists examined whether tax policy favors certain forms of automation that puts workers at a competitive disadvantage.

7 min read
Federal tax policy after the 2020 election, upcoming federal tax increases, another round of economic relief

Prospects for Federal Tax Policy After the 2020 Election

President Biden and Congress should concentrate on areas of common ground, finding incremental places to improve the tax code. A bipartisan bill recently introduced to help retirement savings is a good model for what incremental reform may look like.

4 min read
CARES Act, Senate Coronavirus bill, Senate Coronavirus relief, Senate Coronavirus Aid

Reviewing the Commitment to American GROWTH Act

House Republicans recently introduced HR 11, the Commitment to American GROWTH Act, outlining an alternative to Democratic presidential nominee Joe Biden’s tax vision. The proposal would address upcoming expirations of the 2017 Tax Cuts and Jobs Act (TCJA) and create or expand other tax provisions designed to boost domestic investment.

5 min read