Congressman Brown Introduces Legislation to Expand Tax Incentives For Domestic R&D and Manufacturing
By PRESS OFFICER
Office of Anthony G. Brown
WASHINGTON, D.C.—Today [June 2, 2017], Congressman Anthony G. Brown introduced the 21st Century Investment Act of 2017 (H.R. 2671). The bill incentivizes businesses to manufacture goods domestically and provides a research and development (R&D) tax credit that will boost economic growth, create jobs and encourage local investment. By permanently increasing the tax credit rate for domestic contract research from 20 percent to 25 percent and increasing the tax deduction for income attributed to domestic manufacturing from 9 percent to 15 percent through 2024, the bill will incentivize companies to create new goods and services in the United States.
“As we confront the challenges of the 21st century economy, the United States must remain a friendly place for companies to innovate and manufacture. We have a tremendous capacity to manufacture here at home, and the more we incentivize companies to do so, the more benefits the American people will experience,” said Congressman Brown. “By incentivizing companies to conduct R&D efforts in America, we create good-paying jobs, catalyze production and support businesses. This bill provides a one, two punch that prepares us for the future and ensures the U.S. remains competitive at home and abroad.”
By instituting these tax incentives, the United States will remain a premier location for research, manufacturing and innovation. Every dollar spent in the manufacturing sector adds another $1.37 to the economy, and each job in manufacturing creates 2.5 jobs in local goods and services. Over the next decade, estimates show that the U.S. will need to confront a shortage of skilled workers to fill nearly 3.5 million jobs. In addition, recent data shows that the R&D activity contributes to approximately 1.2 percent of Maryland’s gross state product, while the manufacturing industry contributes nearly $20 billion to the gross state product. Overall, manufacturing supports over 100,000 jobs in the state of Maryland.
Extended and expanded when Congressman Brown was Lieutenant Governor, the state of Maryland already provides two state R&D tax credits, the Basic R&D Tax Credit and the Growth R&D Tax Credit. In addition to the state-based Maryland tax credits, businesses will also be able to file for the federal tax credit proposed in this bill.
“If Maryland and the rest of the United States wants to continue to compete on a global stage and lead the 21st century economy, we must address yawning gaps in workforce development,” said Congressman Brown. “There are firms across the country desperately in need of staff with the proper skills; we need to ensure the next wave of the American workforce is ready to fill those positions. Providing this tax credit to employers creates good paying, family-supporting jobs that people can depend on.”
The 21st Century Investment Act of 2017 amends Section 41 of the Internal Revenue Code of 1986. The credit has been allowed to expire and has been expanded several times over the past three decades. As an original pioneer of the R&D tax credit, the United States has since fallen behind to countries such as France, Ireland and Russia who are beginning to offer more generous tax incentives. While the United States remains a premier location for large and small businesses to invest, this bill will help to solidify American leadership in research, development and manufacturing.
Representatives co-sponsoring the bill include: David Cicilline (RI), Elijah Cummings (MD), Michelle Lujan Grisham (NM), Bill Keating (MA) and Eleanor Holmes Norton (D.C.).
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