A new study commissioned by the R&D Credit Coalition concludes that the R&D tax credit does increase research spending and creates jobs in the United States. The report contends that the impact of the tax credit would be even greater if Congress and the President were to strengthen the credit and make it permanent.
Among the findings of the study are:

• The existing credit is estimated to increase annual private-research spending by $10-Billion in the short-term and by $22-Billion in the long-term; the benefit being substantially greater in comparison to the credit’s approximately $8-Billion cost against annual federal revenue.
• It is estimated that, by increasing the alternative simplified credit (ASC) from 14% to 20%, the annual private-research spending in the U.S. would increase by an additional $5-Billion to $15-Billion in the short-term and that long-term spending would increase to about $33-Billion.
• The report also demonstrates that research-related jobs would increase in the U.S. by about 130,000 in the near-term and by another 300,000 in the long-term as a result of extending the credit and strengthening the alternative simplified credit.

The coalition’s report submits that the research and development tax credit encourages businesses to make long-term investments in technology that ultimately creates new jobs, boosting the economy and encouraging further innovation development.