Here’s a really awful idea that is being circulated by the Commerce Department. A federal tax on innovation is a terrible idea – especially if it’s implemented without a vote of Congress. But that’s exactly what Commerce Secretary Howard Lutnick floated in a recent WSJ article:

Commerce Department officials are discussing charging patent holders 1% to 5% of their overall patent value, a shift that could dramatically increase fees, according to people familiar with the matter. The idea is being considered by Commerce Secretary Howard Lutnick as part of his plans to raise revenue and narrow the government’s budget deficit.

Patents are constitutionally protected property rights. They drive innovation in key 21st century industries like technology and medicine. They encourage the next Thomas Edisons. Our well-designed patent protections are a major reason that such a high percentage of major tech and medical breakthroughs were invented and patented in the USA. Those property tight protections combined with the 2017 tax reforms brought research and development back to these shores.

Someone needs to remind Secretary Lutnick that when you tax something you get less of it. We’re told the idea is a trial balloon. We hope it bursts.