Senator Warren, Representative Deluzio Seek Answers on Republican Plan for Tax Breaks Benefiting Defense Contractors

Press Release

"A revival of the R&E tax break would add to the billions in savings your companies have already received from the 2017 Trump tax cuts, but it is far from clear if that is the best use of taxpayer dollars. As Congress continues to debate corporate tax reform and government funding levels -- including proposals for further corporate tax giveaways, large increases on military spending, and cuts to other critical government programs -- we should understand how your company and other massive corporations will be rewarded."

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"These tax breaks are nothing but corporate handouts. In the case of the R&E deduction, there is no evidence that shifting to a five-year amortization for R&E costs lowers private investment at all. In fact, in 2022, after the R&E break expired, there was a boom in private R&E investment from large corporations. Notably, the R&E deduction shift to five-year amortization was originally included in the TCJA to offset steep cuts to the corporate tax rate in the bill, but some hoped that it would never come into force, and now, thanks to lobbying from companies like yours, House Republicans are trying to reverse the switch."

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"Meanwhile, Republicans plan on paying for their bill by gutting the clean energy credits passed through the Inflation Reduction Act. These energy credits will help grow the U.S. economy up to $200 billion and create up to 1.3 million jobs nationally by 2030, mainly by incentivizing investments in research and domestic manufacturing."

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