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by rezonant 307 days ago
I actually addressed that in an edit to a parent post:

> [Deductions on] research and development is one of the main reasons taxation on higher income classes is effective: The idea is you'll be taxed if you want to take it as profit, but if you advance the state of the art, innovate, or create new technology then you can deduct that. The high tax rates of the US post WWII up to Reagan worked so well because of this combination: It was incentivized for businesses to reinvest their profits into R&D, since they'd hopefully be able to scale their profits if the R&D was successful.
1 comments
ivewonyoung 306 days ago
Not sure how it addresses the fact that Democrats want higher taxes on corporations regardless of what you stated, hence they didn't act to stop this on their watch. You're just arguing that Democrats were wrong to let the R&D exception expire, which I already agree with.

Even after this recent change by Republicans, increasing corporate taxes(say after the 2028 elections if Democrats are elected) means there is less money leftover to spend on R&D.

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rezonant 305 days ago
> increasing corporate taxes(say after the 2028 elections if Democrats are elected) means there is less money leftover to spend on R&D.

You misunderstand how tax exemptions work.

When you make money, you need to pay taxes on that money. However, if you spend that money in certain ways, the tax code lets you take that amount of money and _deduct_ it from your overall taxable income. Thus, you pay taxes on _less_ of the money you earned. Imagine the tax rate was 100%, but you could deduct 100% of R&E expenses, and you spent 100% of your income on R&E. You would pay zero dollars in taxes.

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ivewonyoung 305 days ago
> Imagine the tax rate was 100%, but you could deduct 100% of R&E expenses, and you spent 100% of your income on R&E. You would pay zero dollars in taxes.

No. The Democrats added a new minimum corporate tax last time they were in power. As I have to keep repeating, their policies and actions are all about taxing companies more which why they didn't repeal the R&D exemption removal. They consider it a tax loophole that companies abuse to pay less taxes.

Kamala's proposal was to increase the minimum corporate further.

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