This website requires certain cookies to work and uses other cookies to help you have the best experience. By visiting this website, certain cookies have already been set, which you may delete and block. By closing this message or continuing to use our site, you agree to the use of cookies. Visit our updated privacy and cookie policy to learn more.
This Website Uses Cookies
By closing this message or continuing to use our site, you agree to our cookie policy. Learn More
This website requires certain cookies to work and uses other cookies to help you have the best experience. By visiting this website, certain cookies have already been set, which you may delete and block. By closing this message or continuing to use our site, you agree to the use of cookies. Visit our updated privacy and cookie policy to learn more.
Assembly Magazine logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Assembly Magazine logo
  • Home
  • Magazine
    • Current Issue
    • Digital Edition
    • Archives
    • Specs Book
    • How-To-Guide
    • Buyers Guide
  • Exclusives
    • Plant of the Year
      • About Plant of the Year
      • Nomination Form
    • Capital Spending
    • State of the Profession
  • Industries
    • Aerospace
    • Appliance
    • Automotive
    • Medical Devices
    • DFMA Assembly
    • Green Manufacturing
    • Lean Manufacturing
    • Electronics Assembly
    • Machinery Assembly
  • Technologies
    • Adhesives
    • Assembly Presses
    • Automated Assembly
    • Dispensing
    • Motion Control
    • Screwdriving and Riveting
    • Plastics Assembly
    • Robotics
    • Test and Inspection
    • Welding
    • Wire Processing
    • Workstations
  • Columns
    • Assembly in Action
    • Automation Profiles
    • Medical Device Assembly
    • On Campus
    • Shipulski on Design
    • The Editorial
    • XYZ
    • Moser on Manufacturing
    • 21st Century Assembly
    • Mind Your Ps and Qs
  • New Products
  • More
    • Web Exclusives
    • Classifieds
    • eNewsletter
    • Blog
    • Market Research
    • Store
    • Product Spotlight
    • White Papers
    • Integrated Showcase
    • Custom Content & Marketing Solutions
    • Monthly Quiz
    • Sponsored Insight
  • Multimedia
    • Assembly Radio
    • Assembly TV
    • Image Galleries
    • Webinars
    • Interactive Spotlights
    • eBooks
  • Events
    • Calendar
    • The Assembly Show
  • Contact
    • Contact Us
    • Advertise
  • InfoCenters
    • Collaborative Robot Revolution
    • Factory of the Future
Home » The Editorial: Expand the R&D Tax Credit
ColumnsThe Editorial

The Editorial: Expand the R&D Tax Credit

April 21, 2011
Reprints


For now at least, America remains the world’s leading innovator, developing life-saving medical devices, state-of-the-art computer systems, and breakthrough manufacturing technology.

Unfortunately, we are rapidly losing ground to competitors around the world. The U.S. share of global R&D has fallen from 39 percent in 1999 to 33 percent in 2007, while China’s share has increased fourfold. China’s increase in R&D spending accounted for nearly one-third of the global increase in R&D between 2001 and 2006.

Other countries are moving ahead of us by offering stronger incentives to attract R&D and the high-paying jobs that go with it. In 2009, the United States ranked 24th out of 38 industrialized countries in the strength of its R&D incentives.

If the United States is to remain a world leader in innovation, we must expand the federal R&D tax credit to encourage more research and development. In March, a bipartisan group of lawmakers introduced legislation to do just that. Sponsored by Rep. Kevin Brady, R-TX, the American Research and Competitiveness Act of 2011 (H.R. 942) would increase the R&D tax credit from 14 percent to 20 percent.

The larger credit should encourage companies to invest more in innovation. In the short run, a larger tax credit could spur the creation of 162,000 jobs, according to a 2010 study by the Information Technology and Innovation Fund. Expanding the tax credit would also lead to a $66 billion increase in our annual gross domestic product and nearly 4,000 new U.S. patents.

The bill would also-finally-make the credit permanent. Since the R&D tax credit was first enacted in 1981, its expiration date has been extended 14 times. It will expire again at the end of the year.

The constant brinkmanship has become tiresome. On average, R&D projects take five to 10 years. Making the credit permanent will enable entrepreneurs to make those long-term investment decisions with confidence.

If passed, the legislation would cost approximately $100 billion over 10 years, and President Obama’s proposed 2012 budget accounts for the expansion.

The credit would be money well-spent. Only R&D performed in this country qualifies for the credit. Nearly 18,000 companies of all sizes use the credit, and some 70 percent of credit dollars go toward salaries of workers engaged in R&D.

For their part, manufacturers claimed nearly 70 percent of the R&D credit amounts in 2007. In 2008, manufacturers performed $190 billion in R&D, which accounted for nearly 70 percent of all business R&D performed in the United States.

Such investment spurs economic growth. Between 1994 and 2004, manufacturing productivity increased 60 percent. That could not have been accomplished without investment in R&D.

At press time, the U.S. unemployment rate stood at 9.2 percent. Washington can make a dent in that statistic by passing the American Research and Competitiveness Act. We urge them to do so.

subscribe to assembly

Related Articles

Congress Approves R&D Tax Credit; Will You Take Advantage?

Editorial: R&D Paves the Way

On Campus: Clemson Rolls Into the Automotive R&D Spotlight

The Editorial: Tax Cuts Will Help Manufacturers

Related Products

Faster, Better, Cheaper in the History of Manufacturing: From the Stone Age to Lean Manufacturing and Beyond

The Foreman on the Assembly Line

The Basics of Self-Balancing Processes: True Lean Continuous Flow

Introduction to the Design and Behavior of Bolted Joints, Fourth Edition: Non-Gasketed Joints

Related Events

Lean Six Sigma in the Age of Artificial Intelligence: Harnessing the Power of the Fourth Industrial Revolution

Subscribe For Free!
  • Print & Digital Edition Subscriptions
  • Assembly eNewsletters
  • Online Registration
  • Subscription Customer Service
  • Mobile App

More Videos

Popular Stories

lordstown motors

Electric Truck Manufacturer Buys GM’s Lordstown Assembly Plant

Bobcat manufacturing

Bobcat Announces Manufacturing and Assembly Facility Upgrades

Wearable Device 11-27

Wearable Lets Users Control IoT-Enabled Devices With Brain Waves

Rayovac 11-20

Energizer Moving VT Battery Manufacturing Facility to Former Rayovac Plant

Breaking and Industry News

Airstream Manufacturing Expands With $50 Million Factory

Upcoming Assembly Events and Webinars

Events

January 1, 2030

Webinar Sponsorship Information

For webinar sponsorship information, visit www.bnpevents.com/webinars or email webinars@bnpmedia.com.

View All Submit An Event

Poll

Cloud Computing

Are you using cloud computing at your assembly plant?
View Results Poll Archive

Products

Welding: Principles & Practices

Welding: Principles & Practices

This text introduces students to a solid background in the basic principles and practices of welding.

See More Products
assembly buyers guide

Assembly Magazine

assembly dec 2019

2019 December

The 2019 December Assembly features our Capital Spending Report, plus much more. Check it out today!
View More Create Account
  • More
    • Assembly Plant of the Year
    • Manufacturing Group
    • List Rental
    • Organizations
    • Connect
    • Want More?
    • Polls
    • Privacy Policy
    • Subscribe
    • Survey And Sample

Copyright ©2019. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing