TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation President Scott Hodge is joined by economist Erica York and Senior Policy Analyst Garrett Watson to answer a question U.S. policymakers have been asking for decades: how should we tax research and development (R&D)?
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 (soon to be amortized over 5 years)–the best way to encourage innovation?
What other tools do policymakers have at their disposal and what does the future hold for the taxation of R&D in America?