The Research and Experimentation Tax Credit in the US gives a tax break to companies that invest in research and development, and while lawmakers typically agree innovation should be encouraged, Joshua Krisch writes at Scientific American's Observations blog that it's a temporary credit.
It, he notes, has been around since the Reagan administration and has been renewed 15 times, but when it is not, Krisch says companies take a hit.
"This place is dysfunctional," Representative Jim McDermott (D-WA) said last week. "Businesses and individuals need to know what the tax is going to be in the beginning of the year so that they can plan and take advantage of incentives rather than waiting until the last two weeks of the year when the Congress may or may not act."
Recently, Krisch adds, it had looked like the credit might become permanent — President Obama mentioned it in his State of the Union address last January and the House of Representatives passed a bill that would've extended the credit permanently. But then an argument over how to pay for the bill's estimated $150 billion cost derailed it.
"This is disappointing news for science and scientific research. It's also a little bit frustrating," Krisch says. "Here we have a case where everyone — Republicans, Democrats, Congressmen and the White House all claimed to want the same thing. In the end, nobody got what they wanted."
The credit has been given a one-year extension, he adds.