Science, Innovation, Politics
I'd rather dump corporate income taxes altogether.
Thanks for posting this, Roger. James Pethokoukis is clearly wrong. "Markets vs. Bureaucrats." Apparently Mr. Pethokoukis doesn't understand how an R&D tax credit works, which is that companies get the credit regardless of what kind of research they invest in. The point is to stimulate investment in early-stage research (something that drives innovation and economic growth). Claiming that the R&D tax credit "picks winners" is simply false and quite obviously so. Dr. Atkinson is correct in calling this what it is: ideological.
Corporate welfare has been sent through an Orwellian dictionary so as to allow serious people to confuse writing off expenses with direct subsidy. To confuse depletion of an asset with operating subsidy. To confuse avoidance of double taxation with tax payer paid operating support.For instance, recently an allegedly serious Congressman compared the money spent by tax payers on NPR with the advertising expense companies take when they choose to advertise on FOX.The lack of rational and informed thinking resulting from this Orwellian process of redefinition is dangerous for us all. R&D, one of the few things that actually opens new frontiers for society, is now being added to the target list. We either stop all of this institutional madness, or we will suffer in ways no one is even close to comprehending.
Another point- in a two part interview, you can almost always identify the liar as the one who interrupts the most.
I should note that (although I may remember incorrectly) acquisition costs for technology companies used be significantly allocated as 'R & D', thus providing yet more tax writeoffs.Certainly this is true to some extent, but not to the tune of the tens and hundreds of billions just in the tech industry alone.
.The R&D tax credit, like virtually all tax credits should be abandoned. Expensing R&D costs is quite enough.One of the major problems with credits is it helps big strong companies that can hire battalions of lawyers to figure out how to legally characterize as many activities as possible as either research or development. This is work that consumes wealth rather than creates wealth. As such, it deserves sunset rather than support..
The fact is that many (if not most) people are looking for some way to save money when it comes to tax time but aren’t sure how get the most out tax rebates or credits. Here is a R & D Tax Credit Blog that has great information on this issue.