Taxes and Budget

Arbitrary funding cuts and increased political involvement in grantmaking will further weaken an already less productive U.S. science system. Policymakers should pursue reforms that enable researchers to generate more breakthroughs and strengthen U.S. competitiveness.

Korea should use its AI-memory windfall to finance the shared capabilities, research infrastructure, and commercialization pathways needed to create the next boom. The Future Response Fund should address enduring commercialization gaps, not create permanent spending commitments.

The right goal for Korea is not an AI tax, but an AI diffusion strategy paired with sound tax reform. The government should help firms adopt AI, help workers transition, and make sure productivity gains are broadly shared, without making the use of AI itself more expensive.

Proposals to tax AI computing power are proliferating as concerns about AI grow. But an AI compute tax would slow productivity growth, drive investment abroad, and do little to protect workers or preserve the tax base.

Philadelphia’s proposed $1 rideshare tax attempts to address school funding shortfalls. The city should reject narrowly targeted taxes on app-based services and instead pursue broader, more neutral revenue mechanisms such as property or income taxes.

The Canada Strong Fund is trying to be a sovereign wealth fund, development bank, commercial investor, industrial policy vehicle, and retail savings product all at once. Until Ottawa clearly defines its purpose, it risks becoming a debt-financed vehicle searching for a rationale.

Watch ITIF’s Centre for Canadian Innovation and Competitiveness' webinar featuring leading experts who will discuss what is driving Canada’s capital exodus and what it will take to fix it.

The government-funded research initiatives that sustain our intellectual infrastructure—the body of scientific knowledge that underpins success in all other domains—must continue and receive more support than they have previously.

In the short term, Congress should move quickly to reauthorize CISA 2015 and fund the agency’s operations, even if the overall government funding fight continues. Then, to keep CISA fully operational in the future, Congress also should create a dedicated funding stream so the agency doesn’t have to rely so heavily on appropriations.

A proposed patent tax would punish startups, weaken U.S. competitiveness, and gut a system that has powered American innovation for centuries—all without solving the budget problem it aims to address.