Now that Election Day has passed, Congress has returned to the nation’s capital this month for a lame duck session to finish work on a list of must pass items in the short time remaining this year. Much has been said about the gridlock that has plagued Congress and left it with few accomplishments to show, but there is still an opportunity for lawmakers to pass a bill that will do a great deal to grow our economy.
ITI urges Congress to choose growth over gridlock, and take advantage of this opportunity by swiftly passing tax extender legislation which would encourage more companies to grow their operations in the U.S. and create jobs. Today, ITI joined our voice in chorus with a broad swath of industries, charities, and nonprofit organizations – more than 500 organizations – to send a message to Congress warning that failure to pass a tax extenders bill before the end of this year would inject instability and uncertainty across all facets of the economy. Even worse, a failure to extend these provisions means an immediate increase in the tax bills of American families and businesses.
Extenders like the research and development (R&D) tax credit and CFC look-thru (a rule that clarifies the tax treatment of controlled foreign corporations, or CFCs, of US-based multinational companies) are especially important for the tech sector and many other industries. While their names are complex, put simply, these provisions are critical tools that promote business investment, expansions, job creation, and economic growth.
The R&D tax credit is really about encouraging the kind of risk taking that is necessary to experiment and innovate. It also encourages companies to choose the U.S. as the home for their enterprises that in turn put Americans to work in good-paying jobs, developing the innovations that are transforming our world and making our lives better. Think about it, in just 2011 alone, businesses invested $267.3 billion in R&D in the United States.
U.S. businesses, large and small, have learned to become global players to thrive in today's economy, competing in newly emerging markets to reach new customers. If Congress fails to extend the CFC look-thru rule though, it will be more expensive for American businesses to compete globally and expand their enterprises, holding back the economic growth and job creation their success brings to our communities.
The widespread societal and economic benefits of these tax incentives are well documented, and Congress has even renewed the R&D credit 15 times since it was first introduced in 1981. Much to his credit, House Ways and Means Committee Chairman Dave Camp (R-MI) recognizes this and continues to lead efforts to make these provisions permanent. This year, the House of Representatives passed the bipartisan American Research and Competitiveness Act of 2014 (HR 4438), which ITI supports, that would make the R&D tax credit permanent. News reports indicate that leadership in the House and Senate are working to see if they can come to an agreement on this issue.
Tax extenders may not be household buzzwords, but when it comes to keeping the economy humming, they are indeed the proverbial low-hanging fruit. ITI will continue to work with Congress as it moves toward an agreement that renews and extends these provisions. Now is the time to act.