May 20, 2015 10:39 AM | Permalink |
For Immediate Release: Wednesday, May 20, 2015
Contact: Jenice R. Robinson, 202.299.1066 x 29, Jenice@ctj.org
Research Credit Is Synonymous with Corporate Giveaway
Following is a statement by Robert McIntyre, director of Citizens for Tax Justice, regarding the research credit, a bill that has bi-partisan support and is expected to pass the U.S. House today.
“Today, the House is expected to vote to more than double the size of the corporate research tax credit and make the credit permanent. Supposedly, this tax break spurs innovation and ultimately creates jobs. But in practice, it’s just another giveaway to huge, profitable corporations.
“In 2012, 84 percent of the $10.8 billion in research credits claimed went to corporations with more than $250 million in revenues. Ordinary Americans would not be pleased to learn that Congress is giving corporate tax breaks for ‘research’ activities such as redesigning packaging for food, determining how to replace workers with machines, writing internal accounting software used by no one outside the company that creates it, and a vast array of activities that have nothing to do with real scientific research.
“Lawmakers continually bring up the federal deficit as a reason for reducing public services. But apparently, deficits don’t matter when it comes to corporate tax breaks. The congressional Joint Committee on Taxation estimates that the House’s expanded research tax credit will cost $182 billion over the next decade, and will grow to $25 billion annually by 2025. That amount of revenue could fund, for example, maintaining earned-income tax credit and per-child credit expansions passed as part of the 2009 economic stimulus. Or it could be used to vastly increase federal direct support for real basic research.
“The congressional leadership has vowed to cut trillions of dollars from the federal budget over the next decade. If their selected votes on tax cuts are any indication (the research tax credit, repealing the estate tax, for example), the wealthy and corporations need not worry about bearing the impact of those cuts.”
For a more comprehesive look at the research credit see our report:
Reform the Research Tax Credit — Or Let It Die