Sens. Pat Roberts (R-KS) and Chris Coons (D-DE) are co-sponsoring legislation that would incentivize companies to develop and manufacture products in the United States.
The Invent and Manufacture in America Act would provide tax cuts for companies that not only conduct research and development in the United States, but also manufacture products resulting from this research and development (R&D) in the country.
“Research and development in new technologies and new products is an important source of economic growth,” Roberts said. “The new technologies, products, and lower prices generated by investments in R&D create new jobs, raise wages, and create new demand for goods and services. Our legislation would increase cash flow for small businesses and start-ups involved in R&D intensive activities by reducing past, current and future tax liabilities leading to permanent tax savings.”
The bill enhances the value of the R&D tax credit by up to 25 percent for companies that perform the majority of manufacturing operations in the United States. The enhancement is graduated so that the credit rate increases as the percentage of a company’s domestic manufacturing operations increases.
“To remain the world’s leading economy in the 21st century, we must continue to expand investments in research and development, which is the lifeblood of economic growth,” Coons said. “But it’s not simply enough to invent products in the United States. Those products should also be manufactured here. A strong, growing manufacturing sector will create jobs and drive more foreign direct investment and reshoring to the United States. That’s why I’m proud to partner with Senator Roberts to introduce bipartisan legislation that will help companies invent and make their products in America.”
Scientific and technological innovation accounts for nearly 50 percent of economic growth in the United States, the bill’s sponsors said. R&D investments, however, have remained relatively stagnant for more than a decade, increasing only 1.6 percent annually since 2000.
During this same time, other nations have dramatically increased R&D investments, the senators said. Germany, Japan, and South Korea all spend more on R&D than the United States as a share of GDP.
Since 2000, the country has lost more than 5 million manufacturing jobs and more than 70,000 manufacturing plants have closed or moved offshore.
“The ‘Invent and Manufacture in America Act’ amplifies the success of the R&D tax credit by expanding its benefits to more fully serve the American worker,” Keith Roe, president of the American Society of Mechanical Engineers (ASME), said. “When American innovations are manufactured abroad, we surrender our competitive advantage. This bill will strengthen innovation at home and make the United States more competitive globally by encouraging more domestic R&D and manufacturing. When goods and technologies are manufactured where they are invented, it promotes further advances and allows the entire innovation pipeline to reinvigorate itself more quickly.”
The legislation has been endorsed by ASME, Information Technology Innovation Foundation (ITIF), American Small Manufacturers Coalition (ASMC), and National Council for Advanced Manufacturing.