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Congressman pushes tax credit to boost R&D
by Joseph R. Perone, Newark
Star-Ledger
December 19, 2005
The federal tax credit for research and development should be made
permanent to encourage startup businesses to delve into new
technology, Rep. Rush Holt (D-12th Dist.) said during a business
conference yesterday.
Holt, who chaired the Einstein's Alley conference to promote
innovation in central New Jersey, said the tax credit is
periodically renewed on a temporary basis, even though it has
bipartisan support.
"The R&D tax credit has been renewed for just another year," he told
about 150 people in Princeton. "I don't know how companies can plan
for the future if the tax credit is continued year by year."
The tax break, known as the research and experimentation tax credit,
has never been a permanent part of the federal tax code. The credit,
which is designed to stimulate research and development by
businesses, has been extended 11 times and modified five times since
it was enacted in 1981.
Critics have said the credit is not large enough "to boost business
R&D investment to levels commensurate with its potential spillover
benefits," according to a Congressional Research Report published
last month. The credit has "exerted a modest stimulus on domestic
business R&D investment from 1996 to 2000," the report said.
Greg Olsen, founder of Sensors Unlimited of Princeton and only the
third private citizen to fly in space, told the conference that
budding entrepreneurs should figure out a way to grow plants that
can feed a crew for extended missions, because food takes up too
much room on board a tiny space module.
Olsen, who has sold two startup companies, was on the Soyuz mission
that visited the International Space Station in October.
"How can you store food on a mission to Mars" that might take 18
months, he asked. "If we can learn to grow food, that will take care
of that problem. We could use our exhaled carbon dioxide to help
grow plants."
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