Today—February 29—means that 59 days have passed since the R&D tax credit expired at the end of last year. How long will manufacturers have to wait for Congress act to renew and strengthen this jobs credit? We’ve only heard promises from lawmakers to restore “business extenders,” yet seen no action to date to fulfill that promise. Meanwhile, most of our major trading partners offer more attractive—and permanent— R&D incentives. Right now, with no credit in place, the United States is clearly at the bottom of the pile.
Allowing this tax provision to expire 13 times, which is exactly what Congress has done since 1981, weakens the credit’s incentive value to boost private research and development spending, and ranks among the worst of tax follies by a powerhouse country like the United States. If companies cannot rely on the credit for the duration of an R&D project—for manufacturers typically 5-10 years—companies performing R&D are going to be enticed to look at the 20 OECD countries offering more generous R&D tax incentives.
We’ve got to ask ourselves, if not now, when will Congress seamlessly renew and strengthen the credit?
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