The Case for Improving America’s Research and Experimentation Tax Credit

When it comes to the advanced industries that drive the modern economy, America is no longer the undisputed leader. There is an intense race for global #innovation advantage on all fronts, as not only China, but also many traditional U.S. allies have made surpassing us a centerpiece of their economic policies. At risk are good-paying jobs, U.S. #competitiveness, and #nationalsecurity.

Among the key policy tools that America’s competitors have deployed to establish an edge in that competition are tax incentives for companies to invest in research and development. Scholarly studies have shown that America has used R&D tax incentives to stay ahead of its competitors as recently as the mid-1990s. Yet today, among the 30 OECD nations, and the BRICs (Brazil, Russia, India and China), America’s R&D tax credit support ranks just 24th in its generosity. Other nations have realized the importance of R&D incentives and have either added them to their innovation policy tool box or expanded them. Now, the U.S. R&D tax subsidy rate is just 57 percent of the median rate of these other nations.

Read the full op-ed here.