Menu
Tax Notes logo
HOMETax Notes ResearchFederalOther Documentswashington roundup

COUNCIL ON COMPETITIVENESS RECOMMENDS 'STRUCTURING TAX POLICY TO PROMOTE SAVINGS AND LONG-TERM INVESTMENT.'

SEP. 7, 1988

COUNCIL ON COMPETITIVENESS RECOMMENDS 'STRUCTURING TAX POLICY TO PROMOTE SAVINGS AND LONG-TERM INVESTMENT.'

DATED SEP. 7, 1988
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Council on Competitiveness
  • Index Terms
    R&D Tax Credit
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 88-7535
  • Tax Analysts Electronic Citation
    88 TNT 185-22

 

=============== SUMMARY ===============

 

The Council on Competitiveness, a coalition of executives from industry, organized labor, and higher education, has published a report, which recommends that the Federal government "improve the macroeconomic environment that affects the private sector's ability to develop and apply technology." To this end, the Council said, the government should restructure its tax policies to promote savings and investment. Specifically, the Council first suggested that the government make the 20 percent R&D tax credit permanent.

The Council also suggested that the government impose a permanent moratorium on Treasury Regulation 1.861-8. Regulation 1.861-8 prevents U.S. companies with excess foreign tax credits on their overseas operations from deducting part of their R&D expenses for U.S. tax purposes, according to the Council. In this way, the regulation increases the effective domestic tax rate on R&D and thus increases the costs of conducting R&D in the U.S., the Council said. Increased domestic R&D costs, the Council reasoned, motivate companies to move their R&D activity abroad.

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Council on Competitiveness
  • Index Terms
    R&D Tax Credit
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 88-7535
  • Tax Analysts Electronic Citation
    88 TNT 185-22
Copy RID