Research project

Investigator:

Amedeo Rizzo

Abstract:

The aim of this paper is to conduct a comparative analysis of the tax policies implemented by the European Union and the United States to enhance intellectual property and R&D.

When tax policy instruments are used for purposes that differ from revenue-raising and wealth-redistribution, several criticalities arise, and a deep investigation becomes necessary to understand whether the objectives are pursued without hampering the status quo. The system
should be looked at as a whole and several considerations should be conducted to understand whether there might be different ways to reach the same objectives more efficiently and without affecting the neutrality of the tax system. All in all, the proposed policy should be coherent with its objectives and avoid undesired effects. The second section of the paper is dedicated to this investigation.

The most common ways to incentivise innovation through the tax system are R&D tax credits and IP Box Regimes. In the third section, these different measures are theoretically assessed, against the most relevant variables, according to up-to-date optimal tax theories and
international tax policy scholarship.

The last part of this work focuses on comparing the context and the legal framework of the European Union and the United States. In comparing those two different ways of achieving the same objective, it formulates specific considerations on the different nature of the tax policies, underlining potential causes and consequences of different choices. Consequently, the research draws final considerations according to the findings of the analysis, including hints for further research.