U.S. House of Representatives Committee on Ways and Means

04/08/2021 | News release | Distributed by Public on 04/08/2021 07:55

ICYMI: Biden Tax Hike Could Lead to Billions in Cuts for American R&D

ICYMI: Biden Tax Hike Could Lead to Billions in Cuts for American R&D

April 8, 2021 - Blog - In Case You Missed It...

President Biden's tax hikes not only push Americans' jobs overseas but jeopardize American R&D-the very thing he claims needs more investment, despite rejecting Republican proposals to do just that.

President Biden has said: 'You know, decades ago, the United States government used to spend 2 percent of its GDP - its gross domestic product - on research and development. Today, we spend less than 1 percent. I think it's seven-tenths of 1 percent.'

As job creators and businesses brace for Biden's $2 trillion tax increase, some companies, including Raytheon, are signaling that they'll have to cut billions in R&D - which poses a huge risk to American jobs, wages, and our competitiveness. Under Republican tax reform, America saw an R&D boom. Raytheon's CEO said it himself:

'It means I have to reduce my investment budget by about 20%… I'm not sure that's exactly what the president wants to have us do.'

'It's a pretty simple discussion … If you want U.S. companies to invest in technology and innovation, you have to have incentives to do that here in the United States.'

Key Takeaways:

  • China spends more public dollars on R&D than America because it is a Communist country. America's R&D sector thrives exactly because it isn't controlled by the government.
  • One company notes that the higher tax bill would threaten $5 billion in annual spending on capital and research and development
  • Republican tax reform led to record R&D investment, 25 percent higher than in the years prior to enactment.
  • Republicans want to do more, by doubling the R&D tax credit and expanding innovation and good-paying jobs in America.
  • Instead of repealing key pieces of the Republican R&D boom, Biden should work with Republicans to improve our low #24 ranking on global R&D incentives.