ITIF outlines several steps Congress should take to strengthen the credit.

Expanding the Research and Development Tax Credit to Drive Innovation, Competitiveness and Prosperity

Congress should at least double the regular R&D tax credit to 40 percent and the Alternative Simplified Credit to 28 percent, since U.S. R&D tax credit support currently ranks 31st out of 28 OECD nations and the four BRIC economies.

To Do: Double the R&D and Alternative Simplified Credits

U.S. tax policy needs to prioritize innovation and competitiveness—especially as China rapidly gains ground as a leading innovator in advanced industries.

Twelve Tax Reforms to Spur Innovation and Competitiveness

Examines the issue of corporate tax reform and lays out key principles for policymakers to consider as well as specific policy recommendations for crafting an innovation-based corporate tax code.

Effective Corporate Tax Reform in the Global Innovation Economy

Congress should create a Super CHIPS Tax Credit for advanced-industry R&D and production firms’ purchases of machinery, equipment, and buildings.

Partly Done: Create a Super CHIPS Credit

Although it contains many positive proposals, the Tax Reform Act of 2014 would reduce the effectiveness of R&D tax incentives.

Why The Tax Reform Act of 2014 Should Expand, Not Cut, The R&D Tax Credit

As recently as the mid-1990s, the United States maintained the most generous R&D tax incentive in the world. As scholarly studies have shown, that helped America stay ahead of its competitors by boosting R&D investment, innovation, jobs, and GDP growth. Fast forward to today, and it’s a very different picture.

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

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

The Research and Experimentation Tax Credit can play an important role in ensuring that the United States remains an attractive location for global companies to conduct research. Not only does the credit spur the retention and attraction of investment in R&D in the United States, new scholarly research shows convincingly that the credit is an effective tool for stimulating additional research, which in turn leads to faster economic growth. However, while the United States had the distinction of providing the most generous tax treatment of R&D of all OECD nations in the early 1990s, by 2004 we had dropped to 17th most generous.

The Research and Experimentation Tax Credit: A Critical Policy Tool for Boosting Research and Enhancing U.S. Economic Competitiveness

Rob Atkinson’s article in the July 2007 issue of the Journal of Technology Transfer arguing for the importance of the Research and Experimentation Tax credit. The article calls for several important changes to the credit: doubling its current value, modifying the Alternative Simplified Credit to become incremental, and expanding the flat credit for collaborative R&D.

To Do: Include Standards-Setting Expenditures in the R&D Credit

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Help US Companies Compete Against China on Technology Standards

Deep Competitiveness

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Expanding the Research and Development Tax Credit to Drive Innovation, Competitiveness and Prosperity

To Do: Double the R&D and Alternative Simplified Credits

Twelve Tax Reforms to Spur Innovation and Competitiveness