The Research and Experimentation Tax Credit is currently for companies that increase their R&D spending above a predetermined level. To encourage private investment in innovation, this credit, which is scheduled to expire in December, should be made permanent. And Congress and the administration should increase the allowable credit from 20 percent to 40 percent of qualifying R&D investments.The bottom line, if you will, is to have the Federal government pay for the R & D that corporations are unwilling to pay for, themselves, as long as we the taxpayers will do it for them. That explains, too, why we see almost three times as much money in the 2007 Bush budget for the restoration of the corporate tax credits as we see going for new education initiatives to counter the "gathering storm." This is noted, too, by Allan Sloan in this Newsweek piece:
the vast majority of the money Bush is seeking for it in fiscal 2007—$4.6 billion of the $5.9 billion—is to reinstate the research-and-development corporate-tax credit that expired last year.What is left over will go into “education initiatives.” Yet as Sloan make clear, this "new investment” is just about half of what will be cut every year for the next five years from education in the form of reduced college tuition assistance. So part of that $12 billion in cuts to student aid will go to fund the "new initiatives." The remainder will be offered for Intel and Dupont R &D.
And what we now know, too, despite what is said by chief ED spinner, Margaret Spellings, the reduced subsidy to banks and other loan companies is made up for handsomely by increasing the interest rates and increasing the amount that students can borrow. And borrow they must, since tuition costs have increased by 35-60% over the past five years, while Pell Grant amounts have remained flat. Remember that Boehner would never allow any ed policy change that could bring harm to his patron, Sallie Mae.