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.”
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