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Congress, Candidates: Tax Extenders Lead to American Jobs

A big part of a pro-growth tech agenda includes corporate tax reform.  It's a priority that we are pressing the presidential candidates to adopt.  The current tax code is outdated.  It stifles innovation and job creation.  There have been a number of corporate tax reform plans put forward, and it will take some time to work through the ideas.  But there are a few simple actions that Congress and the Administration can take right now to help American businesses compete and protect our innovative edge. 

One effort that should be front and center is to pass an extension of the research and development tax credit.  This R&D incentive, along with a host of other key tax credits, lapsed in December.  While there may be myriad reasons why Congress punted on extensions during the winter, the immediate costs are clear:  American businesses are faced with an uncertain tax future and, as a result, are slowing growth or, worse, taking their investments overseas. 

Making the credit permanent would pay enormous dividends in the immediate future.  Estimates indicate that a permanent credit would create 162,000 jobs, add $90 billion to the GDP, and account for an additional 4,000 patents.   That's $90 billion in economic growth that we're leaving on the table for other countries to grab because our leaders are stymied on a way forward.

Terms like "the R&D tax credit", "the CFC look-through", and "the active finance exception," may sound Washington-heavy.  But the impacts of these initiatives will be felt throughout middle-class America.  If Congress extends these tax breaks, American businesses will invest even more here at home, putting more people to work.  That's how we use innovation to drive prosperity and job creation. 

We hope that the Congress and the Administration will come together to approve these commonsense tax incentives.  And then they can start on the bigger issue of reforming the corporate tax code.

Public Policy Tags: Tax Policy