Research and Development (R&D)

Details and Analysis of President Biden’s American Jobs Plan

Details and analysis of the American Jobs Plan tax proposals. Learn more about the major tax changes in the proposed Biden infrastructure plan.

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.

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.

Reviewing the Federal Tax Treatment of Research & Development Expenses

Simplifying the R&D credit, making it more accessible for smaller firms, and ensuring full cost recovery for R&D expenses by canceling the upcoming R&D amortization are three things policymakers should consider when trying to improve the tax code for R&D.

Biden’s Corporate Minimum Book Tax Narrows, but Problems and Uncertainties Remain

The corporate tax base should be reformed directly, rather than piecemeal through a complicated and burdensome separate tax applicable to a small number of companies.

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.

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.

Tax Subsidies for R&D Spending and Patent Boxes in OECD Countries

Despite the coronavirus pandemic’s immense health and economic challenges, the crisis has also revealed the incredible value of innovation.

Tax Policy Improvements Needed to Help Industries through the Semiconductor Shortage

As lawmakers evaluate how to respond to the global semiconductor shortage, they should consider allowing full cost recovery across all types of capital investment—inventories, machinery and equipment, structures, and R&D.

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?

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.

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.

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.

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.

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.

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.

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.

Patent Box

Biden’s Plan to Boost Research and Development Should Include Cancellation of Upcoming R&D Amortization

As concern over American competitiveness and onshoring of innovative activity increases, presidential candidates and policymakers should keep in mind the tax increases scheduled to take effect in the coming years, including the amortization of R&D and phaseout of the broader expensing provisions.

Tax Policy After Coronavirus: Clearing a Path to Economic Recovery

Governments at all levels must work to remove the tax policy barriers that stand in the way of economic recovery and long-term prosperity following the COVID-19 crisis. Our new guide outlines several comprehensive options that policymakers can take at the federal and state levels.