Washington D.C. – According to Bernie Becker of the Hill, “Lawmakers seeking progress on tax reform are considering a new incentive for innovation that would help companies that already pay comparatively little in taxes.The preference, called a “patent box” or “innovation box,” essentially gives companies a tax break on income from their intellectual property, making it especially attractive to high-tech and pharmaceutical businesses.”
But while there’s bipartisan interest in patent boxes, congressional tax writers also acknowledge they face challenges getting the policy right, and the idea itself has a host of political obstacles.
Sen. John Thune (R-S.D.), one of the leaders of a Finance Committee working group on business taxes, called patent boxes “en vogue” and “kind of the latest thing” in tax reform.
But Thune, the No. 3 Senate Republican, also stressed there “are really serious questions we have” about patent boxes. “It’s more complicated than I think people think,” he said.
The pitch from patent box supporters is simple: The U.S. needs incentives to keep the technology and pharmaceutical jobs that policymakers have long prioritized, as well as to create new ones.
Companies have historically had a tax credit for conducting research. But other developed countries have already put patent boxes into place, leading advocates to insist the U.S. risks getting left behind in fields that rely on intellectual property.
“These companies are competing globally, and other countries are competing for them,” said Rob Atkinson of the Information Technology and Innovation Foundation. “If you end up giving the tax cuts to this kind of industry, there’s more competitive effects than if you just lower the rates for everyone.”
For the full story:
http://thehill.com/policy/finance/244366-tax-writers-mull-new-breaks-for-innovators
Sen. John Thune (R-S.D.), one of the leaders of a Finance Committee working group on business taxes, called patent boxes “en vogue” and “kind of the latest thing” in tax reform.
But Thune, the No. 3 Senate Republican, also stressed there “are really serious questions we have” about patent boxes. “It’s more complicated than I think people think,” he said.
The pitch from patent box supporters is simple: The U.S. needs incentives to keep the technology and pharmaceutical jobs that policymakers have long prioritized, as well as to create new ones.
Companies have historically had a tax credit for conducting research. But other developed countries have already put patent boxes into place, leading advocates to insist the U.S. risks getting left behind in fields that rely on intellectual property.
“These companies are competing globally, and other countries are competing for them,” said Rob Atkinson of the Information Technology and Innovation Foundation. “If you end up giving the tax cuts to this kind of industry, there’s more competitive effects than if you just lower the rates for everyone.”
For the full story:
http://thehill.com/policy/finance/244366-tax-writers-mull-new-breaks-for-innovators
