FACT CHECK: GOP Tax Reform Led R&D Boom—But Dems Want Washington In Charge

America can beat China on innovation with even better tax incentives for private investment
September 15, 2021 — Blog    — Facts Are Stubborn Things    — Press Releases    — Select Revenue Measures   

Democrats believe that higher taxes and spending will lead to stronger American innovation and research & development (R&D)—but even China keeps taxes on their technology firms that compete with American companies as low as 15 percent.

Here are the facts:

Democrats’ tax hikes jeopardize American research and development.

  • President Biden wants to double taxes on investment, and put Washington in charge of all R&D funding—destroying the investment infrastructure that provides small businesses with financing.
  • One company warned that a higher tax bill would threaten $5 billion in annual spending on capital and R&D.
  • China keeps taxes on technology firms—that directly compete with American technology firms—at a low 15 percent.

Republican tax reform unleashed American innovation.

  • Under Republican tax reform, America saw an R&D boom.
  • Republican tax reform led to record R&D investment, 25 percent higher than in the years prior to enactment, and we can do more by permanently doubling the R&D tax credit and expanding innovation and good-paying jobs in America.
  • Instead of repealing key policies that led to the Republican R&D boom, President Biden should work with Republicans to improve our low #24 ranking on global R&D incentives—rather than make us even worse off.

Democrats’ crippling tax hikes will ship U.S. jobs overseas.

  • While millionaires and well-connected corporations receive hundreds of billions of dollars in loopholes and tax rebates, Main Street businesses will be hit with hundreds of billions of dollars in tax increases.
  • In addition to having U.S. jobs shipped overseas, the non-partisan JCT found that 25 percent of the burden of Democrats’ tax hikes would be borne by workers in slashed wages.