Work Smart, Tax Smart — The R&D Tax Credit

By February 27, 2008Innovation, Taxation

Lots of good articles on tax policy in the February/March issue of The Ripon Forum, the magazine of the Ripon Society. Featured is a piece by National Association of Manufacturers President John Engler on the R&D tax credit, “Incentive and Inventive: Smart Tax Policy Needed to Promote U.S. Manufacturing.”

It’s a comment many of us heard in our early years on the job, delivered by a demanding boss or exasperated coworker: “Work smarter, not harder!”

Manufacturers in the United States take those words to heart. They have to.

Although no strangers to hard work, America’s manufacturers know that their competitive advantage in the hard-fought global marketplace lies in the ability to work smarter. Other countries will boast lower costs of labor or raw materials, so it’s skilled and creative people who ensure America’s competitive edge – the edge that builds on research, development, investment and innovation.

For many years, a bipartisan consensus in Congress has helped maintain that American edge. Republicans and Democrats both have supported smart policies that encouraged the R&D and innovation that lead to new products, technologies and manufacturing processes. Yet year after year, Congress still does a dumb thing: It allows the federal research and development tax credit to expire, throwing U.S.-based business into a world of uncertainty and frustration.

The NAM has a recent ManuFacts summary of the R&D tax credit available here.

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