With the State of the Union address merely hours away, much of the buzz surrounding President Obama’s speech has focused on issues that divide Congress and the business community. Yet, the President has an opportunity to highlight one area where he, Congress, and manufacturers across the country agree –a strong, permanent R&D incentive would boost US innovation, jobs, and global competiveness.
The Administration’s fiscal year 2014 budget proposal included a permanent R&D credit with an enhanced alternative simplified credit (ASC). The Administration even released a report in past years on the merits of a robust US R&D incentive, explaining that an “enhanced and permanent credit will fund more than $10 billion per year in research activity in the United States, supporting nearly 1 million jobs in research.” The report also highlights the credit as a vital way for the US to “out-innovate our competition.”
Manufacturers know firsthand that a strengthened, permanent R&D incentive would provide the certainty needed to enhance its incentive value and help ensure the United States’ leadership in global innovation. For this reason, the R&D Credit Coalition recently wrote a letter to President Obama, urging him to include a permanent R&D incentive in his fiscal year 2015 budget proposal. The letter also called for the ASC to be enhanced to 20 percent, from its current 14 percent.
Since the R&D Credit is now expired, the President should take the opportunity tonight highlight the need to reinstate a strengthened credit as a permanent part of the U.S. tax code, an issue upon which we can all agree.