Why Expanding the Research and Development Tax Credit is Important

In the recent past, there have been several suggestions to eliminate or reduce the Research and Development (R&D) Tax Credit, which has been in place since 1981. This is a huge mistake and the R&D Tax Credit should be expanded. Now, you may ask yourself, why it is essential to extend the R&D Tax Credit rather than do away with it? Here are a few reasons why.

1. Increased U.S Economic Competitiveness

Firms that perform research and development can compete more favorably in the global markets. Most countries significantly expand their R&D tax incentives for business to ensure that they are able to keep up with the changes in the economy and expand.

Today, the United States is ranked 25th for providing tax incentives for research. This is a massive set back from when it was ranked 10th in 2000. Congress should, therefore, strive to remedy this current situation by expanding the research credits rate from 14% to 20% and lowering the corporate tax.

Understanding exactly how to calculate the rates and everything in general about tax credits can be a little tricky if you don’t have the necessary knowledge. Try enrolling in institutions such as the Northeastern University for taxation courses. You could also opt for Northeastern University online courses in case you want to register in a distant learning program. The Northeastern online courses can be quite beneficial in helping you get a more in-depth perspective of how expanding the R&D tax credit will lead to increased U.S economic competitiveness.

2. Increase Standard of Living

The amount of research that companies in the U.S will be performing will be significantly increased, and this will, in turn, lead to an increased number of jobs. Research and development opens up a whole new job market filled with thousands of employment opportunities that the American people could take advantage of quickly.

Yes, research jobs are considered to be more demanding and time-consuming, but the pay is very considerate. Some of the best paying jobs are usually in the research and development sectors. With higher standards of living, then the level of productivity will undoubtedly rise.

3. Leads To New Innovations

Research easily expands the pool of knowledge. When industries, individuals, and businesses can fully understand the economy and various sectors of their market, then they can quickly implement changes in their processes and products that will lead to cheaper services and goods. This is a bonus to both the business and the consumers because the company will spend fewer resources in the creation of the goods and services, while the consumer will get to enjoy high-quality products at a reduced price.

Conclusion

Research easily expands the pool of knowledge. When industries, individuals, and businesses can fully understand the economy and various sectors of their market, then they can quickly implement changes in their processes and products that will lead to cheaper services and goods. This is a bonus to both the business and the consumers because the company will spend fewer resources in the creation of the goods and services, while the consumer will get to enjoy high-quality products at a reduced price.