Sept 8, 2010 – TechNet Applauds President’s Call for Permanent R&D Credit
Washington, DC -TechNet, the bipartisan political network of CEOs that promotes the growth of the innovation economy, today commended President Barack Obama’s call for a permanent extension of the Research and Development tax credit, but cautioned that long-term economic growth is contingent upon a reasonable overhaul of America’s tax code.
“This is a good step in promoting the innovation that drives job creation,” said Rey Ramsey, President and CEO of TechNet. “The R&D credit is one of the strongest tools our nation has to spur the cutting-edge innovation that will drive the creation of more American jobs. At a time of unprecedented economic uncertainty, the R&D credit is an essential investment in our future as nearly two dollars of economic activity are generated for every dollar of tax benefit.
“We must remember however, that this policy is one element. The only way to achieve the kind of economic recovery that will create jobs over the long-term is a comprehensive policy that promotes American innovation at every stage. Part of that effort must be comprehensive reform of our nation’s outdated tax system that provides things such as a permanent R&D credit without putting America’s companies at a disadvantage to our foreign competitors. The politics that emerge during election season should not stop our national leaders from working together to develop smart policies based on a clear-headed analysis of American competitiveness and what drives job creation.”
The R&D tax credit expired on December 31, 2009. Established in 1981, the credit is one of the most basic ways the U.S. can foster the creation of new technologies. This was the thirteenth time since its inception that policymakers allowed the credit to lapse. Without the R&D credit, many companies across the country might not choose to make potentially risky R&D investments because the return on those investments would be insufficient and the projects require long-term planning as they represent multi-year funding commitments.
Facts about the R&D Credit:
Nationwide, at least 70 percent of R&D investments are spent directly on employment.
This tax credit applies only to R&D performed in the United States, and it stands as the only broad incentive offered by the federal government for private-sector investments in R&D.
TechNet is the national, bipartisan network of CEOs that promotes the growth of technology industries and the economy by building long-term relationships between technology leaders and policymakers and by advocating a targeted policy agenda. TechNet’s members represent more than one million employees in the fields of information technology, biotechnology, e-commerce and finance. TechNet has offices in Washington, DC, Palo Alto, Sacramento, Seattle, Boston and Austin,Texas. Web address: www.technet.org. You can also follow us on Facebook and Twitter at @technetupdate.