Corning, NY – U.S. Senator Kirsten Gillibrand today announced a new proposal to spur innovation and job creation in the Southern Tier. At Corning, Senator Gillibrand detailed a new proposal to expand, simplify, and make permanent the Research and Development Tax Credit. With leading research institutions, cutting edge businesses, and highly-skilled entrepreneurs, New York is poised to lead America’s high tech economy. More than 2,000 New York companies could take advantage of the R&D credit. Making it permanent could increase private investment in R&D by more than $7.5 billion across the country.
“My number one focus is on creating good-paying, family-supporting jobs,” Senator Gillibrand said. “By supporting research and development, we can help our businesses become more competitive and create the high-tech jobs of tomorrow. Our state is already home to the universities, businesses, laboratories, researchers and the bright minds we need for long-term economic strength. This proposal would leverage more private investment in our high-tech sector, creating good paying jobs right here in the Southern Tier.”
“Innovation has sustained Corning for 160 years and continues to be a critical component of our growth strategy,” said James B. Flaws, vice chairman and chief financial officer, Corning Incorporated. “Senator Gillibrand’s proposal to improve the effectiveness of the R&D tax credit will help create an environment where American innovation can thrive and bring the high-wage manufacturing jobs needed to ensure U.S. competitiveness in a global economy.”
Expanding the R&D Tax Credit would create more than 162,000 jobs nationwide, according to the Information Technology and Innovation Foundation. More than four-fifths of the cost of the credit is spent directly on wages for researchers.
Senator Gillibrand’s proposal would not only create R&D-based jobs, it would encourage companies to plan for the future, investing in new ways to streamline their processes and upgrade their products.
Senator Gillibrand’s proposal would:
- Expand the current credit by changing the formula to provide greater incentive for companies to increase investment
- Simplify the current credit, which is highly complicated and confusing.
- Make the new credit permanent, which would provide private companies with the confidence they need to make significant future investments in R&D.
The R&D Tax Credit has been extended 14 times by Congress, but has never been made permanent, making it difficult for companies to make plans based on the support and investment from the program. Additionally, the current process for claiming the credit is very complicated. The proposal pushed by Senator Gillibrand would make the credit permanent to maximize its benefits for domestic economic growth, and simplify the formula for claiming the credit to make it accessible to more companies, matching 20 percent of a company’s increased research expenditures.
Thirty years ago, the U.S. was the global leader in providing tax incentives for private investment in R&D, but now the U.S. ranks 17th in the world among developed countries. Senator Gillibrand’s proposal would expand America’s effort to leverage R&D investment to support long-term economic growth.
Before the economic recession, R&D investment was already on the rise in New York. From 2003 to 2007, New York’s research and development sector grew by 16 percent, creating a 28 percent increase in investment to a total of $10.9 billion in 2007, according to the National Science Foundation.