Cybersecurity Is Expensive–That’s Why We Should Offer Tax Incentives


September 23, 2015

Congress last overhauled the federal tax code in 1986, the year that IBM introduced its first laptop computer (weighing in at a svelte 12 pounds), Microsoft went public, and eight-bit Nintendo game consoles were all the rage. AOL would not offer Windows-based subscriptions for another six years.

Not surprisingly, the tax code does not address cybersecurity. That needs to change.

Presidential candidates are talking about their plans to change tax rates and eliminate certain loopholes. At the same time, policymakers are dealing with the endless loop of high-profile data breaches, and are discussing how to respond to countries that are believed to be behind these damaging attacks.

Rather than addressing these two vital issues separately, policymakers should consider how the tax system could promote cybersecurity.

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