Q&A: Would tax write-offs encourage riskier research?

Would high taxes with research-cost write-offs encourage private industry to take larger research risks?

The proposal is rejected because companies can move activity or use subsidiaries. That objection rests on an interpretation of their international flexibility.

A viewer proposes high tax rates combined with research-cost write-offs as a way to encourage private industry to take larger research risks. Dr. Clarke rejects the proposal on the grounds that companies can move activity or operate through subsidiaries. He places that objection within a longer history of international business, arguing that economic activity had already been global for centuries. Modern communications, in this interpretation, make those connections more visible.