UPDATE: Sen. Gillibrand's R&D tax credit faces odds
U.S. Senator Kirsten Gillibrand (D-N.Y.) is touring central and western New York today, promoting a proposal that she says would create jobs by helping grow research and development operations.
Under the proposal, companies would receive a tax credit if they invest in research and development. Gillibrand says the current program is problematic because the tax credit needs to be renewed annually.
According to the Post-Standard:
The R&D Tax Credit benefits companies that do technological research performed in the United States. It was enacted in 1981 and has been extended 13 times.
Gillibrand's proposal would make the credit permanent, and would also expand who can qualify for the tax credit, and make applying for it easier. Taking those steps would grow R&D, with the result being more jobs for lab workers, researchers, prototype builders, and on and on, according to Gillibrand.
The junior senator says the U.S. used to rank number one in providing private companies with tax incentives for investing in R&D. Now the country is ranked 17th.
In a statement about the proposal, Gillibrand said that upstate is ripe for fostering more R&D because of its universities, laboratories, and businesses.
The Democrat’s scheduled tour to promote the credit is unfolding today. She stopped in Rochester this morning, and is in Buffalo and Syracuse this afternoon.
Update: Gillibrand told an audience in Buffalo that the credit’s constant expiration date breeds uncertainty.
“The problem with that is, a business can’t count on it. When looking for investors they need to know that it will be cost efficient to invest in the business not just the next year but five years down the line, ten years down the line. You have to be able to have those five and ten year plans,” Gillibrand says.
But the tax credit is also an expensive undertaking on the government's part. To have a chance of actually becoming law, Gillbrand says the cost of the tax credit will likely need to be offset with cuts in other areas.
“It’s an investment, so you have to get the support of colleagues who want to make this investment over other investments. Because everything we’re investing in should create jobs. This is the kind of investment that pays for itself because of the revenue it generates,” Gillibrand says.
Gillibrand says more than 2,000 western New York businesses are eligible to claim the credit.