Checking the Innovation Box: How Lower Taxes on IP-Based Activities Could Boost U.S. Competitiveness

Please join ITIF for an expert panel discussion on how specialized tax incentives for innovative products and services could make the U.S. economy more competitive.

Compared to many other countries, the United States fields an increasingly uncompetitive corporate tax code, which hurts the U.S. economy as a whole. But among the ideas to address that problem, one is garnering an increasing level of bipartisan attention and support: creating an “innovation box.” So named because it can take the form of a checkbox on corporate tax forms, the idea would allow companies to pay a reduced tax rate for income derived from a wide range of qualifying intellectual property such as patents, inventions, designs, or copyrighted computer software.

Over a dozen nations, including China, France, Holland, Switzerland, and the United Kingdom, already offer some form of “innovation box” (often called a “patent box”), and research shows they have been effective in encouraging enterprises not just to patent more but also to invest more in efforts to commercialize their research and development activities into real innovations that reach the marketplace. This event will delve into the lessons from those countries’ experience and explore how Congress could craft such a policy here.