The CEOs of some of the nation's top tech companies wrote Senate and House leaders this week to urge them to extend and expand the research and development tax credit before lawmakers adjourn for the year.
"Failure to pass this legislation will undermine efforts to encourage domestic investment, innovation and high wage employment," the Technology CEO Council said in a letter Monday to Senate Majority Leader Harry Reid, D-Nev., Senate Minority Leader Mitch McConnell, R-Ky., House Speaker Nancy Pelosi, D-Calif., and House Minority Leader John Boehner, R-Ohio, who will become speaker when the GOP takes control of the House in January.
The credit expired, as it has more than a dozen times before, at the end of 2009 and has yet to be extended. At the same time, the credit's worth also has eroded over time, falling from the most effective in the world to 24th best, "behind such nations as Japan, China, India and Korea," the council said.
"As American companies we invest billions in domestic research and development collectively and intend to continue doing so as long as possible," the letter said. "But while other nations encourage innovators to hire more research and development staff in their markets, American policy makers effectively discourage such investments through their inaction and inconsistency."
Senate Finance Chairman Max Baucus, D-Mont., told reporters after a Senate Democratic caucus meeting Tuesday that his preference is to extend and expand the R&D tax credit. "We have to find some way to get that passed," Baucus said.
He also was asked if he would try to move an extension of the R&D credit and other business tax breaks as a separate measure instead of including them in the larger tax bill to extend expiring income tax cuts. "It's hard to get something new...at this late stage in the game passed but it's good policy, it's good law," Baucus said.
He also said that Senate Democrats have yet to formulate a strategy for how they plan to move the tax legislation they hope to pass before adjourning.
The council is chaired by IBM CEO Samuel J. Palmisano and also made up the chiefs of Applied Materials, Dell, EMC, Intel, Micron, and Motorola.