WASHINGTON (PRWEB) November 30, 2015
The Information Technology and Innovation Foundation (ITIF) today urged U.S. policymakers to lower the corporate tax rate on innovative economic activity so the United States can regain lost ground in the global economy. ITIF argued in a new report that an “innovation box” provision—so named because it could take the form of a check box on corporate tax forms to show income that is derived from innovation-intensive activities like research and development—would help the United States compete with a dozen other nations that have already adopted similar tax incentives to attract high-value economic activity.
“People and capital are moving around the world more easily than ever, so the United States must be prepared to compete with every other nation when it comes to retaining and attracting innovation-based investment,” said Robert D. Atkinson, ITIF founder and president and the report’s author. “The U.S. economy cannot stand to lose this global competition, especially for innovation-based industries. A well-crafted innovation box would encourage the kind of economic activity that strengthens a national economy.”
ITIF’s analysis—“An Easy Checkoff for Global Competitiveness: The Case for a U.S. Innovation Box”—details why an innovation box as being considered now in Congress would benefit the U.S. economy. By linking the tax benefit to where companies conduct innovation-intensive activities like research and development, an innovation box would provide an incentive for firms to locate their highest-value activities in the United States. This would not only increase U.S. R&D activity, but also likely lead to increased production activity as well.
Furthermore, the legislation would provide an incentive for U.S. companies to relocate the intellectual property they have moved abroad in recent years back into the United States, which would drive further economic activity.
“Those who believe the United States should refuse to engage in tax competition are in denial about the fundamental realities of the global marketplace,” said Atkinson. “The United States faces robust international tax competition, with other nations influencing economic outcomes in all globally traded sectors. If the United States stays off the playing field, it means that U.S. firms will lose global market share and U.S. workers will lose jobs.”