Washington, DC, June 21, 2006-- In a letter to congressional leaders of both parties, the executive committee of the National Association of Manufacturers (NAM) board of directors urged quick action to extend and strengthen the now expired R&D tax credit.
The letter notes that “...[s]ince the credit expired at the end of 2005, the cost of performing R&D in the United States has increased for the nearly 16,000 companies of all sizes that use the credit.”
“Renewing and strengthening the R&D Credit is key to keeping the United States competitive in the global race for R&D investment dollars,” said NAM president John Engler. “Many of our economic competitors, including Canada, Ireland, China and France, are actively courting U.S. R&D activity with a variety of more generous and permanent incentives. In 2003, foreign-based R&D spending grew faster than U.S.-based R&D spending. The current lapsed R&D credit in the United States, coupled with strong incentives in other countries, are factors in the current trend of increasing foreign-based R&D spending.”
The letter also stresses the important role of R&D and technology investment in the growth of U.S. jobs and innovation. “The manufacturing sector continues to lead private industry in R&D--nearly 60 percent of all private industrial R&D in the United States is performed by manufacturers. R&D fuels the innovation that translates into new products and increased productivity.”
“The NAM is pleased there is bipartisan support in both chambers to strengthen and extend the credit this year,” Engler said. “Because of the importance of this incentive as a lifeline to innovation and technological advancements, we urge you [Congress] to act quickly to strengthen and extend this critical tax provision.”
