Business Roundtable Laments Senate Failure to Appr

Washington, DC, August 7, 2006--Business Roundtable, an association of 160 CEOs of leading U.S. companies with $86 billion in annual research and development spending--nearly half the total U.S. R&D spending, expressed deep disappointment in the Senate’s failed attempt to extend a critical research and development tax credit for America’s businesses. The Roundtable believes the R&D tax credit is an important economic catalyst for maintaining U.S. competitiveness in the global marketplace. “Private research is a significant source of long-term economic growth in the United States. The R&D tax credit allows American companies to remain competitive in the research arena,” Business Roundtable president John J. Castellani said today. “We are disappointed that the Senate was unable to pass this tax credit extension, which has already garnered widespread support from both sides of the aisle.” The United States ranks 14th out of 25 countries surveyed by the OECD on tax incentives for research and development. While the United States still undertakes significantly more research than any other OECD country, lagging growth in R&D as other countries increase this spending is narrowing U.S. dominance in research activities. “Twice in less than three years Congress has let the credit expire and neglected to renew it in a timely manner. While Congress heads home for summer recess, American companies are left facing increased taxes for conducting their research and development here in the United States,” stated Castellani. The research credit was claimed by over 15,500 companies in 2003. Over one-third of these firms were small businesses with assets under $1 million. Manufacturing, in particular, benefits from the incentive. Nearly half of the companies using the research credit in 2003 came from the manufacturing sector. “Research is the cornerstone of innovation, and innovation drives American growth and jobs,” Castellani continued. “The spillover effect of the R&D tax credit is considerable. Discoveries resulting from private research deliver productivity in all sectors of the U.S. economy. Given the importance of extending this tax credit, the Roundtable strongly encourages the Senate to enact this legislation upon return in September,” Castellani concluded.