Understanding how taxation influences innovation is of central importance to create investment incentives for research and development, yet knowledge remains limited due to a lack of data, especially covering a long period of time.

In their recent VOX CEPR column, "Taxation and innovation in the 20th century," Ufuk Akcigit, John Grigsby, Tom Nicholas, and Stefanie Stantcheva use newly constructed datasets from the 20th century to examine the effects of both personal and corporate income taxation on inventors, as well as on firms that do R&D. It finds consistently negative effects of high taxes on innovation over time as well as on individual inventors and firms. Read full story »

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