Vote Explanation: HR 4438 Yesterday I voted against H.R. 4438, legislation that would make the Research and Development (R&D) tax credit permanent and add $156 billion to our deficit over the next 10 years. This legislation passed 274-131. The R&D tax credit provides a tax break for companies that engage in certain types of research and experimentation as part of their business. I voted against making this credit permanent for two reasons. First, although investing in research is worthwhile and should be a priority, I do not believe the tax code is the best method for making such investments and the R&D tax credit does a poor job of spurring new research. A Government Accountability Office (GAO) study found that the R&D credit primarily benefits large corporations, with entities with over $1 billion in revenues receiving half of the credits. In addition, GAO found that the credit is actually a windfall for many of these companies because they would have done the research anyway. Another recent study examined 288 Fortune 500 companies that were profitable each of the five years from 2008 to 2012. Because of various tax breaks, including the R&D credit, these companies received over $364 billion in subsidies through the tax code and paid an effective tax rate of 19.4%, well below the statutory rate of 35%. Second, making the R&D tax credit permanent without reducing spending elsewhere will add $156 billion to our deficit over the next ten years. At a time of tight budgets that have resulted in cuts to the defense budget and domestic priorities like education and infrastructure, I could not support increasing the deficit. Instead of making some corporate tax breaks permanent, I support overhauling and simplifying the tax code, ending special interest provisions and lowering rates for everyone. For more information, check out this editorial from USA TODAY.
Posted on: Sat, 10 May 2014 20:39:34 +0000