Research referenced in White House report

Wednesday, February 1, 2012

by Patty Mah, SAF Communications

The White House, Washington, February, 2012 – A joint report by the White House and the US Department of Treasury referenced a 2004 research paper authored by University of Waterloo's Professor Ken Klassen, Memorial University's Professor Jeffrey Pittman, and University of Cincinnati's Professor Margaret Reed. The White House's report referenced the professors' findings of a cost-effective tax policy for research and development.

Professors Klassen, Pittman, and Reed's paper, A Cross-National Comparison of Research and Development (R&D) expenditure Decisions: Tax Incentives and Financial Constraints, originally appeared in Issue 21 of Contemporary Accounting Research (2004). The paper acknowledged the differences between Canadian and American research and development tax credit systems and examined the cost-effectiveness of each system. The research demonstrated that R&D tax credits were a cost-effective policy to stimulate private sector investment particularly for the US. "There have been other papers of a similar nature, but our interest was the comparison of different systems across similar countries," states Klassen, noting that R&D is an important issue for the American federal budget.

The President's Framework for Business Tax Reform cited Klassen, Pittman, and Reed's paper that estimates private sector R&D investment as high as $2.96 for every $1 of tax credit, indicating a significant benefit to the American economy as proof for the US to maintain its R&D tax credit system.

Professor Klassen joined the University of Waterloo in 1994 after completing an undergraduate and graduate degree in accounting through Waterloo and completing his PhD in Accounting at Standford University. Prof. Klassen currently teaches intermediate tax to undergraduates and tax research to doctoral students at the School.

Check out the graphic created by Memorial University to announce the research Ken Klassen, and Jeffrey Pittman having been referenced by President Obama - click image for larger version:

graphic created by Memorial University to announce the research Ken Klassen

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