Tech Industry Threatens 120,000 Job Loss if R&D Tax Credit Not Extended
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With the threat of 120,000 job losses, the industry trade group TechAmerica is pushing hard for an extension of the U.S. R&D tax credit. The credit brings $2 for every $1 spent back to the United States, claims the group. Tax reform organizations have called the tax credit corporate welfare, and want Congress to let the credit lapse and expire, said an IDG news article. Since 1981 when the credit first began, it has consistently been extended at a cost to the United States of about $7 billion a year. In a sensitive political environment with unemployment hovering near 10 percent, changes to health care, and regulatory reform of the financial and banking systems, the idea of more job loss is something most politicians want to avoid. The tax credit allows anywhere from 14 to 20 percent of R&D spending. When you extend the credits 10 years out, as IDG points out, you're talking about $68 billion. Yet, it's not simply that the industry wants the same tax credit. It wants it increased to the highest levels at 20 percent of spending on R&D costs. Hard to know where Congress is going to go with this one, but combine the threat of more job loss and the argument that companies will move R&D overseas to countries that extend competitive credit, and it is not difficult to imagine the Obama administration and Congress extending the credit. "We're talking about 120,000 jobs -- if anything, this is citizen welfare ... or employee welfare," Bartlett Cleland, senior director of policy for TechAmerica, said to IDG News. "These are not 120,000 sweep-the-floor jobs. These are highly compensated, well-educated U.S. employees." TechAmerica has the backing of over 400 companies, including technology giants AT&T, Hewlett-Packard, Cisco Systems, Intel and Microsoft, and also advocates for increases in the H-1B visa program. Recent H-1B visa news finds more fraud and abuse in the program. |
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Comments (6)
This is basically corporate welfare, and as such is quite disgusting at a time when the United States is running a mult-trillion dollar budget deficit, and a national debt of 10 trillion dollars.
These non-competing companies want a government handout on the one side, but on the other side want to kick U.S. workers out of their own jobs. Basically they have no problem moving the real competition to that of U.S. workers competing against indentured H-1b workers.
CompeteAmerica (highly affiliated with TechAmerica) started opposing the immigration bill once they learned that Companies would no longer control the Green Card visa process, and that the h-1b worker could move their Green Card application process with them when they left a company.
ListenAmerica, these guys are liars, they are simply beholden to their stock holders and the huge CEO mouths that are reaping massive bonuses at the expense of U.S. workers and U.S. taxpayers.
Posted by Joe Lam | October 23, 2009 11:27 AM
Who cares; they are all H-1B’s anyway.
Don’t give them the tax break; in fact they should raise the taxes to help with the deficit!
Posted by JL | October 23, 2009 2:10 PM
WTF, we need a tax credit to bring in more indians on h1-b and l1 visas. get rid of this tax break, this is use to outsource American jobs.
Posted by debug | October 27, 2009 1:44 AM
So which is it? We need government funds to hire US workers to do R&D, or we need to extend the H-1B visas to bring foreign workers to American soil?
I'm all for R&D, and believe we maintain our national edge by unleashing the American creative capacity, spending on average less than 20% of a product's development cost making it better early. And some of our best ideas come from small businesses with the least margin to invest in R&D. But I'm against giving corporate giants my tax money so they can continue to overpay their own short-sighted managers.
Posted by Mike | October 27, 2009 4:28 PM
Since IBM replaced me with a H1B putting me out on the street I say drop the credit and send IBM and the H1B supporters packing. I have no more use for IBM and companies like them. Their products are Microsofty Junk and the leadership is full of nepitism. 10years, numerous patents delivered, strong ethics and they tossed me for being a company man. My freelanced customer base now gets an ear full of Anti-IBM and I always push for dropping IBM for more American companies and products where service, dedication and loyalty mean something to customers just as much as to the employees. DROP R&D credits, the money just flies to China and India anyway.
Posted by Jim Shivers | October 27, 2009 10:52 PM
End the H1B visa now! Contact Durbin and Grassley regarding the status of the proposed legislation S.887 which would require Americans get hired!
Posted by Common Sense | October 31, 2009 4:23 PM