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Archive for August, 2009

Turning Corporate Taxes into an Innovation Spur

As Michael Mandel has written in BusinessWeek, the current U.S. recession is due in part to a shortfall in innovation and competitiveness. Those lags, in turn, can be traced to the U.S. corporate tax code. U.S. statutory and effective corporate tax rates are high compared to those of other nations. Moreover, the code provides only minimal incentives for companies to invest in the building blocks of innovation: research, new capital equipment, and labor skills. It is time to redesign the tax code to help turbocharge the U.S. innovation engine. Doing so will improve U.S. competitiveness, not only by reducing international tax differentials, but by also spurring more domestic investment in research and development, productivity-enchancing capital expenditures, and worker training.

Unfortunately, many Washington economists—principally neoclassical economists—oppose using the tax code to explicitly spur innovation and do not believe that the U.S. is in competition with other nations.

At a Washington tax economist forum, I recently presented the recommendations of a new report from the Information Technology & Innovation Foundation, which I founded and run, calling for making the U.S. corporate tax code more internationally competitive. One prominent congressional tax

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Me Want Cookie

The current federal government policy on cookies, which has not changed in 10 years, has placed strict limitations on the use of persistent cookies on government websites. The result of these limitations is that government web pages are less useable and citizen-friendly than they otherwise could be. As ITIF argued earlier this year, government agencies need flexibility to create new online content and applications without unnecessary restrictions on the use of particular technologies.

The Obama administration’s proposal to revamp the dated website policy on the use of persistent cookies has drawn criticism from certain “anti-cookie” organizations. Groups like EPIC and EFF charge that changing government policy to allow cookies on government websites “fails to protect the privacy rights of U.S. citizens.” While it would seem these groups just have a chocolate chip on their shoulders, their argument made it to page two of the Washington Post.

So getting right to the heart of their argument, does using cookies on government websites violate some basic human right? Of course not. Cookies are not even a serious threat to privacy. Cookies are used for everything from personalizing websites to facilitating online commerce

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