Congress Raised Taxes on Innovation

By December 21, 2007Innovation, Taxation, Technology


Dec. 21 (Bloomberg) — Hewlett Packard Co., CA Inc. and thousands of other U.S. companies may see their taxes rise in 2008 because Congress adjourned without extending a tax credit for research.

Lawmakers including House Ways and Means Committee Chairman Charles Rangel and Senate Finance Committee Chairman Max Baucus said they will take up the credit, along with dozens of other expiring tax provisions, next year. Still, companies that would use the credit cannot assume it will be restored for the purposes of financial reporting.

“For R&D intensive companies, this is an immediate, $8 billion tax increase,” said Monica McGuire, senior policy director for taxation at the National Association of Manufacturers, a Washington advocacy group.

How soon next year, gentlemen?

The NAM’s statement on the failure to extend the R&D tax credit is here.

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