17 is Not Enough: The Case for a More Robust R&D Tax Credit

President Obama’s call to increase the R&D tax credit to 17 percent is an important first step but more needs to be done to improve U.S. competitiveness.

President Obama’s call to increase the R&D tax credit from 14 to 17 percent is an important first step in restoring America’s global innovation-based competitiveness. But if our nation is to really address the challenge—the “Sputnik moment” in the President’s words—17 percent is not enough. Increasing the Alternative Simplified Credit (ASC) from 14 to 17 percent will move the United States from 17th place amongst OECD nations to 13th—an improvement to be sure—but one that will leave the United States far behind the global frontrunners in terms of R&D tax incentives. We urge Congress to take up the President’s call to expand the credit, but expand it to at least 20 percent, as some in Congress have proposed.