FOR IMMEDIATE RELEASE
September 24, 2010

Washington, D.C. – Congresswoman Donna F. Edwards (D-MD) introduced the 21st Century Investment Act, H.R.6201.  The legislation amends the Internal Revenue Code to increase permanently the Research and Development (R & D) tax credit from 20 to 25 percent. Additionally, the proposed legislation increases for ten years the domestic manufacturing tax credit from 9 to 15 percent.  In order to qualify for the tax credits, research activities and manufacturing investments must occur in the United States, and would apply to tax years beginning after the legislation is enacted into law. President Obama called recently for a similar tax credit extension in a speech earlier this month.

“Innovation and a return to domestic manufacturing are critical components to long-term economic growth in this country,” said Congresswoman Edwards.  “The 21st Century Investment Act, which expands permanently the R & D tax credit, and increases the domestic manufacturing tax credit, is exactly what we need to create jobs and compete globally in the 21st Century.  These credits will help companies create good, high-wage jobs and make necessary investments to increase productivity and growth in the short- and long-term.  I thank President Obama for his leadership on this issue, and look forward to working with my Congressional colleagues to pass this important piece of legislation. It’s time to once again put the U.S. at the helm of research and development.”

According to the Information Technology and Innovation Foundation, the United States was the pioneer behind the R & D tax credit in the 1980s, spurring economic gains and the adoption of similar credits in countries all over the world. Since then, many nations have surpassed the United States with far more generous tax incentives for research. In fact, by 2008, the U.S. had fallen to 17th in generosity for general R & D amongst the Organization for Economic Co-operation and Development nations (See figure 1). This legislation authored by Congresswoman Edwards would reestablish the United States as a global leader in research and development, and would provide a platform for 21st century manufacturing.

Figure 1: R&D Tax Generosity in OECD Nations