Foxx Pushes Research And Development Tax Credit

Press Release

U.S. Representative Virginia Foxx (NC-05) today cosponsored H.R. 422, a bipartisan bill that will permanently increase the federal tax credit for research and development. H.R. 422 expands a current federal R&D tax credit from 14 percent to 20 percent and makes the new 20 percent R&D tax credit permanent. The current R&D tax credit is set to expire at the end of 2009.

"Employers struggling to stay competitive during these difficult economic times need relief," Foxx said. "This bipartisan legislation will help keep North Carolina employers competitive in the global marketplace by increasing incentives for research and development investments."

Since employee wages account for approximately 70 percent of R&D investments in the U.S., passage of this bill creates a long-term incentive for job creation as North Carolina wrestles with the current recession. As a result of increasing the R&D tax credit, North Carolina businesses will be able to more effectively compete against foreign business that benefit from other countries' research tax credits.

"The U.S. has the second highest business tax in the world. This places U.S. companies at a serious global disadvantage. But expanding the R&D tax credit will help America retain our place as a global innovator and international business leader,' Foxx said.

The U.S. currently has one of the weakest R&D tax credits in the world. A recent report by Forbes magazine ranked the U.S. near the bottom in tax breaks for R&D spending, saying that current U.S. tax policy helped to "cripple American manufacturers."

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