As Dec. 31 passed without the renewal of a research and development tax credit, the International Technology Association of America (ITAA) and National Association of Manufacturers (NAM) voiced their opinions to Congress.
"We call on Congress to pass a strengthened research and development credit that allows for the creation of the alternative simplified credit as soon as possible in 2006. Technology companies of all stripes factor this tax credit into their plans to conduct research and development in the U. S. and to create high quality jobs," announced (ITAA) vice president Stephanie Childs.
In a Dec. 19 letter to John Snow, Secretary, U.S. Department of the Treasury, ITAA explained, "Successful research and development not only affects the kinds of goods that flow to consumers, but also enhances the labor and capital inputs used to produce them. It is widely agreed that firms doing research and development do not capture all or even most of their investment through the price mechanism."
NAM urged renewal pointing out that " sustained U.S. economic growth depends more than ever on the innovation derived from research and development."
"Our U.S. economy and our manufacturing sector in particular have shown promising signs for many quarters, and it would be a shame to jeopardize this healthy expansion and job growth simply for lack of sufficient R&D investment," reasoned NAM Senior Director for Tax Policy Monica McGuire.
McGuire sees R&D investment in terms of global competition. "Canada, Ireland, China, France and many other economic competitors are actively courting U.S. R&D activity with a variety of incentives. If lawmakers don't quickly turn to extending and strengthening our own R&D credit when they get back to work next year, they'll have to accept responsibility if research formerly done here in America moves overseas."
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