U.S. Rep. Rush Holt (D-West Windsor) said today he will keep pushing for legislation making the federal research and development tax credit permanent, during an address to the Princeton Regional Chamber of Commerce in which he advocated for the role of government in making investments like the R&D credit.
Holt said he wants to expand the R&D tax credit, make it more generous and create a new tax credit for investors who put their money into research companies. "The R&D tax credit returns at least two dollars for every dollar spent," he said.
Debbie Hart, president of BioNJ, the association of the state's biotech research firms, said the fact that the R&D tax credit is not permanent increases uncertainty, and "companies may not get the investment they might otherwise have gotten. It takes $1 billion and more than 10 years to bring a new drug to market, and the more certainty during that process, the better."
Holt said for years, Congress has reauthorized the R&D tax credit annually, instead of making it permanent. "Research has a long time horizon, and a company that is going to decide how much to invest in research has to look many years ahead. So the R&D tax credit, if you can't be sure it's going to be here next year and the year after that, is of limited use," he said.
Holt pointed out that the United States continues to have a strong manufacturing base that is enjoying an upturn right now.
"Manufacturing has grown in the U.S. every month except for two months over the last 36 months, which is not what most people think," he said. Holt said he has sponsored legislation to encourage companies to reverse outsourcing and return jobs to the United States, and to deal with countries that engage in unfair trade by undervaluing their currency.
Rutgers economist Jim Hughes said manufacturing has led the U.S. economic recovery, benefiting from a massive restructuring that lowered production costs, a cheap dollar that fuels exports and soaring domestic natural gas production that pushes down gas prices. "A lot of the economic stars are in alignment for a rebound in manufacturing going forward," he said.