A coalition of Senate Republicans is urging the White House to enlarge and extend a high-tech research tax credit, which could expire at the end of this year.
President Barack Obama's latest budget, released earlier this month, would make that tax break permanent -- a move Sen. Orrin Hatch (R-Utah) and nine other Republicans praised in a letter to the White House on Friday. But they also called on the administration to enlarge the tax credit, citing its potential to stimulate job growth in the tech sector.
"We realize that your budget calls for a permanent extension of the credit, for which we commend you," they continued. "However, we believe that in order to gain the full effect of the incentive and to keep the U.S. as the premiere location for research in the world, we must improve the credit as well as extend it."
Predictably, the tech community has long celebrated the federal government's research tax credit, and it has repeatedly called on the White House to extend it, at the very least.
A bipartisan jobs bill previewed in the Senate this week would have done just that, in accordance with the president's budget request. However, Senate Democrats have since scrapped that version of the jobs legislation -- and with it, the research tax credit extension.
But support for the credit persists on Capitol Hill, as Republican lawmakers, at least, maintain it could contribute about $90 billion in annual economic growth. Ultimately, Hatch and others not only called on Obama to continue fighting for that proposal, but to enlarge it, as it would create "a strong research incentive to keep us first in the world" in tech research.
They also implored the Obama administration to cancel its proposed tax increase on businesses that do most of their work overseas. While the White House maintains that fee is an attempt to recoup money it loses when firms use international locations to skirt domestic tax laws, Hatch and his colleagues said it was simultaneously stifling innovation.
"In reality, U.S. firms compete on a global scale, and our current worldwide system of taxation often leaves our companies at a serious disadvantage to those based in other nations," they wrote. "We urge you to abandon these proposals and join us in moving in the other direction by lowering our corporate tax rates, which are among the world’s highest, and making other changes that would make our international tax system more competitive, not less."