President Barack Obama unveiled a newly proposed stimulus package that includes plans to expand and make permanent a research and experimentation tax credit for companies that perform research and development in the U.S.
The economic proposal would increase research and experimentation credits by 20%, allocating about $100 billion in tax breaks over 10 years to companies that invest in domestic R&D. Obama said he would pay for the tax breaks by closing loopholes that allow companies to financially benefit by moving jobs and R&D overseas.
Medical-device lobby groups said it was too soon to know how helpful the proposed R&E tax-credit expansion would be in spurring product innovation and job growth. But at least one organization was encouraged. “AdvaMed has long supported making the R&D credit permanent,” said Brett Loper, senior executive vice president of government affairs for the Advanced Medical Technology Association. “We look forward to seeing the details of this new proposal and the other tax changes being discussed today to determine how they will affect America's medical technology companies.”
But a spokeswoman for the National Venture Capital Association, which recently launched the Medical Innovation & Competiveness Coalition, a newly formed lobby organization, said the plan announced today would mostly benefit large devicemakers, not startup companies. “What our experience has been is that if a company is not profitable and paying taxes, they wouldn't be eligible” for the credits, said NVCA spokeswoman Emily Mendell. Those companies, she added, are waiting to see the outcome of a small business aid bill that is currently before the Senate.
