Extension of the Research and Development Tax Credit

Floor Speech

Ms. ZOE LOFGREN of California. Madam Speaker, I rise to ask my colleagues to act swiftly to pass a strengthened and seamless extension of the Research and Development Tax Credit.

The R&D tax credit expired at the end of last year, creating an unacceptable degree of uncertainty for our country's most innovative industries.
An investment in R&D is an investment in the U.S. economy. In 2003, for example, U.S. companies invested $140.1 billion in domestic research and development.

As we have seen in Silicon Valley and elsewhere, that investment has strengthened our economy and led to remarkable technological advancements.

At a time when our economy is shedding jobs, a swift extension of the R&D tax credit makes abundant sense. More than 90% of the benefits of the credit are attributable to salaries of workers performing U.S.-based research.

A permanent extension of the credit would be ideal. Since its inception in 1981, the R&D tax credit has been extended 12 times for periods ranging from 5 years to 6 months.

Given the long time horizon for returns on R&D investments, this ad hoc and piecemeal approach to extending the credit is problematic.

Nonetheless, the prospect of the credit lapsing altogether is even more problematic. Given the intense global competition faced by our most innovative industries, we cannot cede any more ground to those countries that provide expansive, permanent R&D incentives to lure away R&D investments.

Swift action on the R&D tax credit is critical to innovation centers like the Silicon Valley and to the overall health of the U.S. economy.

We must act quickly and decisively to maintain and advance America's place as a leader in innovation.

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