The Senate just this afternoon cleared final passage by a vote of 62 to 36 of a Jobs/Unemployment Benefits/Tax Extenders bill (H.R. 4213) that restores the proven tax incentive to keep jobs here in the United States and place our country in the global race for investment dollars.
How does it keep jobs here? The credit cuts the cost of doing R&D here in the United States. More than 70 percent of credit dollars are attributable to R&D wages (remainder is used for supplies & materials). What race? The race that has 20 OECD countries, many of which are our major trading partners, offering an R&D tax incentive while the U.S. watches R&D drift offshore attracted by more generous and often permanent R&D tax incentives.
Manufacturers, which must be high-tech to survive in a fiercely competitive global market, are innovators, using R&D to develop new products and increase productivity. Manufacturers lead innovation, create opportunity, and pursue progress. R&D drives all three of these characteristics of a modern manufacturer.
Next step: Congress should send ASAP to the President a tax bill that fully restores the R&D tax credit.
Monica M. McGuire is senior policy director for taxation at the National Association of Manufactures and serves as executive secretary of the R&D Credit Coalition.
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