Jumpstart Our Business Strength (Jobs) Act
JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT
Mrs. MURRAY. I rise today to join with Senator Hatch to strengthen and extend the research and development tax credit. We are all concerned about our slow economy. Every day we learn of more American jobs that are being shipped overseas. We worry about American companies losing out in the global marketplace and the impact that has on our workers and on our economy.
Today, we are offering a way to fight back and help our workers and companies continue to lead the world in innovation. Today, I am proud to offer an amendment that will support high-wage jobs for American workers at home and make our products more competitive around the world.
Anyone who wants to support good-paying American jobs, and anyone who wants to help American companies compete and win in the global marketplace should vote for the Hatch-Murray amendment. We all know research and development is a critical part of any business's success, but investing in R&D is not cheap. Our foreign trade competitors offer substantial tax and financial incentives to encourage American companies to make their research investments elsewhere. But we need those jobs in the United States and this amendment gives us a chance to support American workers in the face of foreign competition.
That is why the R&D tax credit is so important. It provides a real incentive for companies to increase their investment in U.S.-based research and development. The credit helps stimulate innovation, wages, and exports which all contribute to a stronger economy and a higher standard of living for American workers.
This is about investing in America. Because this tax credit is only available for R&D performed in the United States, it provides a discount on qualifying expenditures, and it is a proven incentive for U.S. companies to increase their R&D investment in the United States.
Unfortunately, the existing research and development tax credit will expire this June. Unless we take action, in just a few months we will be throwing away one of the best incentives for spurring investments at home. I have always supported making the R&D tax credit permanent, but because of budget constraints, we are not in a position to do that today. But we can do the next best thing and extend and strengthen this incentive.
The Hatch-Murray amendment does three things: First, it extends the traditional credit for 18 months through December 31, 2005; second, it increases the alternative incremental credit rate starting in January of 2005; and finally, again starting in January of 2005, it provides an alternative simplified credit to encourage even more research-intensive businesses to spend more on research in the United States.
The R&D tax credit is a great example of how we make the Tax Code work for American workers and American families right here at home.
I have a letter from the R&D Tax Credit Coalition, and I ask unanimous consent to have it printed in the RECORD after my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit No. 1)
Mrs. MURRAY. Mr. President, this letter is actually signed by over 500 companies and associations and urges Congress to permanently extend the R&D tax credit and make the modifications contained in S. 664.
I share with my colleagues a portion of the letter:
The technological innovations made possible by the R&D Credit enable companies to bring more products and services to market, increase employment, and raise the standard of living for all Americans.
R&D helps manufacturers and services companies with U.S. operations maintain a competitive edge over lower-cost foreign competitors.
It allows a small, medium or large company to reduce its financial risk in expensive, labor-intensive R&D investments.
Since the credit was created in 1981, investments in technology and innovation have spurred economic growth and contributed greatly to our country's high standard of living. Continued R&D spending is a necessary element in our country's ability to invest for our future.
This is not some abstract economic principle. It is a real incentive that creates jobs and helps workers in America. I have seen it firsthand at companies throughout Washington State. This year, Microsoft plans to invest $6.8 billion on R&D. Because this tax credit is targeted almost exclusively at wages, the credit will translate into additional jobs in Washington State and in the United States. That will mean jobs not just at Microsoft but at many other local companies.
In fact, according to a February 25, 2003, article in the Seattle Times, one study found that every job at Microsoft supports 3.4 other jobs in the economy. It also found that from 1990 to 2001 Microsoft was responsible for more than a fourth, 28.3 percent, of King County's growth. That is an example of how one company's investment in R&D is supporting good family wage jobs throughout the region.
That is just one company. There are many other companies engaged in R&D in Washington State and in the United States. Their investment in R&D will help our workers and help our economy.
I want to share some other figures that show the importance of R&D investment, especially in Washington State.
In the year 2000, companies performed almost $200 billion in R&D; $9.8 billion of that research was performed in Washington State.
Let me shed some light on types of employers that are doing that work. Thirty-three percent of the research done in Washington State was performed by manufacturers. We have seen a terrible loss of manufacturing jobs over the years, and this credit is one way to help them stem the tide. Mr. President, 11.4 percent of the research done in Washington State was done in the professional, scientific, and technical service industries.
This is about moving our economy forward. Technological innovations have accounted for more than one-third of our Nation's economic growth during the last decade. We know innovation is critical to sustained growth in the future.
Extending and improving the R&D tax credit is one of the most important steps we can take right now to foster investment at home and job creation throughout the country.
I urge my colleagues to give American workers a fair shot in the global marketplace by voting for the Hatch-Murray amendment.
Mr. President, I yield the floor.
EXHIBIT 1
R&D CREDIT COALITION,
Washington, DC, February 9, 2004.
Hon. Bill Thomas,
Chairman, Committee on Ways and Means, House of Representatives, Washington, DC.
Hon. Charles Grassley,
Chairman, Committee on Finance, U.S. Senate, Washington, DC.
Hon. Charles Rangel,
Ranking Member, Committee on Ways and Means, House of Representatives, Washington, DC.
Hon. Max Baucus,
Ranking Member, Committee on Finance, U.S. Senate, Washington, DC.
Dear Chairmen Thomas and Grassley, and Ranking Members Rangel and Baucus: We urge you to make the enactment of a permanent research tax credit (R&D Credit) with the modifications contained in companion bills H.R. 463/S. 664 an early legislative priority in 2004.
As you know, the technological innovations made possible by the R&D Credit enable companies to bring more products and services to market, increase employment, and raise the standard of living for all Americans. R&D helps manufacturers and services companies with U.S. operations maintain a competitive edge over lower-cost foreign competitors. It allows a small, medium or large company to reduce its financial risk in expensive, labor-intensive R&D investments.
Since the credit was created in 1981, investments in technology and innovation have spurred economic growth and contributed greatly to our country's high standard of living. Continued R&D spending is a necessary element in our country's ability to invest for our future.
The growth of our economy is inextricably tied to the ability to companies to make a sustained commitment to long-term research. Congress has consistently demonstrated support for the R&D credit. This year, in order to provide stability and to ensure that all companies performing intensive research in the United States are able to benefit from the credit, Congress should make the credit permanent, increase the Alternative Incremental Credit (AIRC) rates, and provide an alternative simplified credit calculation.