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The Honorable Bill Thomas
Chairman
Committee on Ways and Means
United States House of Representatives
Washington, DC 20515 |
The Honorable Charles Rangel
Ranking Member
Committee on Ways and Means
United States House of Representatives
Washington, DC 20515 |
The Honorable Charles Grassley
Chairman
Committee on Finance
United States Senate
Washington, DC 20510 |
The Honorable Max Baucus
Ranking Member
Committee on Finance
United States Senate
Washington, DC 20510 |
Dear Chairman Thomas and Grassley, and Ranking Member Rangel and Baucus:
As Congress considers tax legislation that will stimulate growth in the economy, we urge you to include a permanent extension of the research and experimentation tax credit (the "R&D credit") with the modifications that are contained in H.R.463 and S.664. These changes will make the credit a more effective incentive for research-intensive businesses to perform R&D in the United States.
Research-intensive businesses are facing the same challenges as other companies in the U.S. After a decade of tremendous growth in R&D spending, current projections show flat growth in R&D spending for 2003. These projections are troublesome. 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 R&D tax credit provides companies with a critical, effective and proven incentive to maintain and increase their investment in U.S.-based research and development. Making the credit permanent will provide certainty to businesses that are making critical long-term investment decisions. A permanent credit will encourage the expedited initiation of research projects, create additional jobs and lay a foundation for long-term economic expansion in the U.S.
The credit also should be strengthened so that it provides an incentive for even more businesses engaged in significant research to invest in R&D in the United States. An increase in the Alternative Incremental Research Credit (AIRC) rates and a new elective alternative credit formula, as proposed in H.R.463 and S.664, would provide such an incentive.
Continued growth of our economy is inextricably tied to the ability of companies to make a sustained commitment to long-term research. We thank you for your dedication to policies that will strengthen our economy in this uncertain period and ask for your strong support for enacting a permanent and strengthened credit this year.
Sincerely,
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