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CONTACT: Farrah Kim, +1.202.568.8986, FarrahKim@Rational360.com
TIA Applauds Bipartisan Introduction of GROWTH Act by Senate Finance Committee Leadership
TIA applauds the introduction of the bipartisan Greater Research Opportunities with Tax Help Act of 2011 (GROWTH Act) by Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch, which would simplify and make permanent the R&D Tax Credit.
"Research is the backbone of the ICT industry and the building block for the future development of advanced telecommunications products and services," said TIA President Grant Seiffert. "The R&D tax credit is a critical tool to provide incentives for private investment in research helping to maintain a stable source of funding for the U.S. research ecosystem," continued Seiffert.
Since the time that the U.S. pioneered the R&D tax credit, other countries have recognized the value of the credit in attracting research investment. As of 2008, the U.S. ranked 24th of the 38 countries assessed by the Organization for Economic Cooperation and Development (OECD) in R&D tax credit generosity. Failure by the U.S. to adopt policies that encourage research spending in the U.S. will inevitably lead to research being performed in competing ecosystems.
The GROWTH Act will help strengthen the U.S. research ecosystem both by making the credit permanent and by increasing the value of the alternative simplified credit from 14 percent to 20 percent. Initially enacted under the Economic Recovery Act of 1981 as an economic recovery tool, the credit has since been renewed 14 times. The credit has proven to be cost effective in increasing the overall amount of research activity in the United States, found to produce a dollar for dollar increase in research spending, although some studies find larger effects. Making the credit permanent will increase the positive impact of the credit for research investment.
"A short-term credit provides incentives for short-term research, thereby broadening the gap in basic ICT research spending in the United States. Making the credit permanent will provide firms with the certainty they need to make use of the credit for long-term, basic research," said Seiffert.
About TIA
The Telecommunications Industry Association (TIA) represents the global information and communications technology (ICT) industry through standards development, advocacy, tradeshows, business opportunities, market intelligence and networking. Since 1924, TIA has been enhancing the business environment for broadband, mobile wireless, information technology, networks, cable, satellite and unified communications. Members' products and services empower communications in every industry and market, including healthcare, education, security, public safety, transportation, government, the military, the environment and entertainment.
TIA's 2011 Market Review & Forecast, is available for purchase online at the TIA store. TIA members receive a discount of more than 60 percent off of the cover price. Review copies are available for qualified media.
View video news programming on TIA Now at http://www.tianow.org.
TIA is accredited by the American National Standards Institute (ANSI). Visit tiaonline.org.
TIA's Board of Directors includes senior-level executives from ADTRAN, Alcatel-Lucent, ANDA Networks, AttivaCorp, Cisco Systems, Dow Chemical Company, Ericsson, Inc., GENBAND, Inc., Henkels & McCoy, Juniper Networks, ILS Technology, Intel Corporation, Intersect, Inc., LGE, Microsoft, Motorola, Nokia Siemens Networks, OneChip Photonics, Panasonic Computer Solutions Co., Qualcomm, Research In Motion, Sumitomo Electric Lightwave Corporation, Tellabs, TE Connectivity, Ulticom, Inc., Walker & Associates and WirefreeCom, Inc. Advisors to the Board include FAL Associates and Telcordia Technologies.
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The credit also supports the U.S. research ecosystem through supporting technology employment in the United States as approximately 70% of research costs that qualify for the credit are labor costs. The Department of Treasury estimates that making the R&D tax credit permanent and increasing the alternative simplified credit rate will fund more than $10 billion per year in research activity in the United States, supporting nearly 1 million jobs in research. A permanent R&D tax credit is a critical pillar of the U.S. R&D ecosystem and in asserting U.S. leadership in the ICT sector. TIA appreciates the strong support of the eight cosponsors of the bill: Senators Kerry, Snowe, Wyden, Crapo, Stabenow, Cornyn, Cantwell and Menendez.
For more information on R&D policy and the U.S. ICT industry, please see TIA's U.S. ICT R&D Policy Report, available at TIA's Government Affairs White Papers page.
About TIA
The Telecommunications Industry Association (TIA) represents manufacturers and suppliers of global communications networks through standards development, policy and advocacy, business opportunities, market intelligence, and events and networking. TIA enhances the business environment for broadband, mobile wireless, information technology, networks, cable, satellite and unified communications. Members' products and services empower communications in every industry and market, including healthcare, education, security, public safety, transportation, government, the military, the environment, and entertainment. Visit tiaonline.org for more details.
TIA is accredited by the American National Standards Institute (ANSI), and is a proud sponsor of ANSI’s Standards Boost Business campaign. Visit www.standardsboostbusiness.org for details.
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