Taxes and Budget

The president’s budget proposal for the coming fiscal year serves as a blueprint for how the government plans to deliver on the promise to bolster U.S. investments in science and technology in a bid to outcompete China in key industries.

Congress should make good on its promise to appropriate authorizations in the Chips and Science Act to further energize innovation in clean energy and other critical technologies.

A robot tax is a misguided policy that would inhibit productivity growth that could otherwise make U.S. companies more competitive, create higher-paying jobs, and improve quality of life for all Americans.

The FY 2024 budget request, if met, could maintain bipartisan momentum for clean energy innovation. Congress should support that innovation to foster domestic clean energy industries that can compete globally, minimize foreign dependencies, and address climate change.

Tax incentives for research and development (R&D) in America are less generous than in comparable countries—and now prevent firms from expensing the full value of R&D investments in the first year. Enhancing R&D tax incentives would create high-paying jobs across the country.

Economists agree that because most of the benefits of R&D and its technological breakthroughs accrue to entities other than the investing firm (e.g., customers, competitors, etc.), the current level of R&D investment is well below what would be socially optimal.

As Yogi Berra once said, making predictions is hard, especially about the future. So, looking ahead to the New Year, ITIF can offer predictions with only 90 percent confidence. The other half is prescriptive.

The tax law allowing firms to fully expense their research and development (R&D) costs expired at the end of 2021, and full expensing of equipment costs will begin phasing out in 2023. This decreases firms’ incentive to invest in these key drivers of economic growth and competitiveness. Congress should restore and make permanent full expensing for these investments.

Between 1990 and 2020, the Organization for Economic Cooperation and Development (OECD) has become more reliant on corporate and social insurance taxes and less reliant on individual taxes for revenue.

In 2021, the United States ranked 20th among the 38 Organization for Economic Cooperation and Development (OECD) nations with respect to capital allowances, per data from the Tax Foundation.