Several so-called conservative think tanks and Department of Commerce officials have proposed taxing the income that universities earn from licensing their research discoveries supported by government grants. By effectively taxing research and development (R&D), the engine of growth, the proposals threaten to discourage innovation in semiconductors, energy, medicines, and other critical technologi...
The strongest version of this narrative highlights the Bayh-Dole Act's success in fostering innovation and economic growth. By allowing universities to patent and license federally funded research, the system has generated trillions in economic output, thousands of startups, and entire industries like biotech. The argument against taxing these licensing revenues is compelling: it would discourage R&D, reduce private investment, and ultimately lower government revenue. The government already bene...