(For more stories on the summit, see EXT2 <GO>).
Oct. 5 (Bloomberg) -- U.S. lawmakers should renew the research-and-development tax credit to make it easier for companies to compete globally, said Eli Lilly & Co. Chief Executive Officer John Lechleiter.
“Individual countries -- Ireland, the U.K., France, China, Singapore come to mind -- are very aggressively pursuing high- end research-based kinds of opportunities and jobs” through tax credits and other incentives, Lechleiter said during a panel discussion today in Washington. The event was sponsored by Harvard University and the Business Roundtable, an association of business leaders, and hosted by Bloomberg News.
The U.S. sends mixed messages to industry with the unpredictability of the research tax credit, which is “very fundamental” and should be made “a permanent part of our policy infrastructure,” Lechleiter said.
The research-and-development credit is among dozens of targeted tax breaks set to expire Dec. 31. The research credit was enacted in 1981 and has been renewed 14 times since then. President Barack Obama has favored making the credit permanent as a way to spur economic growth, and last year proposed making it easier for businesses to claim.
In 2008, the most recent year for which data are available, companies claimed a total of $8.3 billion in research credits, according to Internal Revenue Service data. Businesses performed an estimated $289 billion of research and development in 2008, according to the National Science Foundation, a federal agency that provides funding for 20 percent of government-backed research at U.S. universities.
Participants in today’s discussion included corporate executives and university presidents. They emphasized the importance of boosting research funding to make it easier for U.S. universities to draw talented scholars.
“We are facing really competitive offers for our faculty and also a very competitive environment for students thinking about where they want to be educated,” Harvard President Drew Gilpin Faust said during the panel. Institutions in China, Singapore and Europe “are assuring our faculty that they will have almost unlimited support for their work,” she said.
The entire federal research-and-development investment in universities is a “tiny piece of the federal budget,” John Hennessy, president of Stanford University, said during the discussion. To cut that funding off “will just result in weaker economic growth for the country and fewer jobs,” he said.
--Editors: Michael Shepard, Andrea Snyder
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