By Tom Still
MADISON, Wis. — There’s about three weeks left in a presidential campaign that promises to end closer and rougher than a dry shave. Although Americans know where the candidates stand on many national priorities, their positions on the tech-based economy and entrepreneurism in general aren’t dominating social media.
That could change. Here are some issues to watch as the candidates roll toward Nov. 5 – as well as coming months – as the next administration prepares its agenda for debate in the 119th Congress that convenes in January.
Research and development tax breaks: For nearly 70 years, U.S. businesses were allowed to deduct 100% of R&D expenses in the year those expenses were incurred. The result was unprecedented American innovation. That began to change in 2017 with a tax law change and, starting in 2022, businesses were required to amortize R&D investments over five to 15 years, The House of Representatives voted overwhelmingly in early 2024 to go back to the 100%, one-year rule, but the Senate failed to pass it. Look for the bill to re-emerge in 2025.
Deducting more startup business costs: Under current law, new business owners can deduct up to $5,000 in startup costs, such as spending tied to advertising, market surveys, insurance costs and more, in the year they start their business. Up to $50,000 in such as costs can be amortized over 15 years. There are proposals to raise the $5,000 first-year deduction to $50,000, and the 15-year amortization to $150,000 while adding some deductible expenses. Proponents say the change would encourage more people to start businesses; others question whether the high mortality rate of startups makes a 10-fold, first-year deduction jump risky.
Patent law ‘march-in” rights: Some say the federal government should be allowed to appropriate products patented by universities and developed with private money if the underlying research received any federal funding and if the products are deemed unreasonably priced. In patent law-speak, that’s called “march-in” rights. It would be a major departure from the bipartisan 1980 Bayh-Dole Act, which was silent on what constitutes “reasonable” price and which has been credited with spurring innovation at major universities nationwide, including the UW-Madison. Erik Iverson, who leads the independent Wisconsin Alumni Research Foundation, has said the proposal “ignores years of input from experts” who have found “there is no legal justification to redefine march-in rights as a price-control tool.” In short, why would a venture capital firm invest in a patented idea if it could be seized by the government?
Free speech and the internet: Congressional bills such as the Kids Online Safety Act are aimed at protecting children from cyberbullying, promotion of self-harm and other troll-like activities. The lobby group NetChoice is calling “time out” over free-speech implications, arguing the U.S. Constitution’s First Amendment should guard against undue restrictions on Big Tech companies that constitute today’s town square soapboxes. So far, NetChoice has worked to overturn several state laws and the U.S. Supreme Court has sent two social media cases back to lower courts for more study.
Pursuing national solutions to national challenges: From water to energy, and from agriculture to manufacturing, the National Science Foundation’s “Regional Innovation Engines” program is fostering innovation in places best-equipped to show results that can be replicated elsewhere. Two such Wisconsin programs have made the NSF cut thus far. Solutions to PFAS pollution must consider what compounds are dangerous – and can be broken down safely through new technology – versus broad, expensive bans. Artificial intelligence technology is more omnipresent by the day, and public safety regulations are likely, but national standards make the most sense. It would provide a level playing field for innovation with clear rules. Creating safeguards to prevent catastrophic laboratory accidents is a similar issue: Manipulated, runaway viruses don’t care about state lines; on the other hand, there’s no reason to regulate researchers in some states more than others.
Much of this depends on the outcome of the election, especially at the top, where Trump’s agenda envisions deregulation, higher tariffs, tax cuts and allowing banks to back projects with cryptocurrency. Meanwhile, Vice President Kamala Harris is touting her “pragmatist” and “capitalist” credentials and her intent to invest in bio-manufacturing, aerospace, AI and clean energy. More attention is merited for these issues before the election – and well beyond.
Still is president of the Wisconsin Technology Council. He can be reached at tstill@wisconsintechnologycouncil.com.