Feeds

R&D tax credits knocked out in Congressional punch-up

'This is the absolute worst that could happen'

High performance access to file storage

Tech vendors had another reason to cry into their beer today, as it emerged that the congressional logjam that has scuppered the White House’s $700bn bank bailout has also iced the restoration of their beloved R&D tax credit.

Similar breaks on the development of renewable energies have also run into the ground, as Congress spends the Jewish New Year recess thinking of who it will blame for its decision to vote against the Paulson plan to underpin a sinking Wall Street.

The R&D tax credit can cover up to 20 per cent of certain R&D spending by high tech firms, but expired in December - tech bigwigs have been screaming at Washington to get their fingers out and renew the scheme ever since. Craig Barrett slammed polls last month saying Washington refused to recognize that “investment in the future is essential".

Clearly someone heard Barrett in Washington and the credit was duly restored in a Senate vote last week. Tax breaks for the development of solar and wind energy schemes were also given the go ahead, only needing agreement from the House of Representatives before being signed off by the Lame Duck in Chief.

But the House of Representatives – who, unlike the Senate, all face re-election next month – are refusing to play ball, with some demanding that the benefits for tech vendors are offset by a little pain somewhere else, in the form of increased tax revenues elsewhere.

Throw in the excitement amongst members that they had an opportunity to bring the US financial system - and by extension the world’s - to its knees by torpedoing the Paulson plan, and unsurprisingly the tax breaks bill fell right to the bottom of the agenda.

The impasse doesn’t mean only high tech firms take it in the wallet - a range of tax breaks affecting individuals and businesses are still up in the air. Apart from causing tax-planning problems for everyone from school teachers to Craig Barrett, the massive US tax industry – from the IRS to software vendors to tax accountants - is just a few months from the end of the tax year with no idea what breaks will, or won’t, be doled out.

According to the Wall Street Journal, Ralph Hellmann at tech lobby group the Information Technology Industry Council said: "This is the absolute worst thing you could do in this current economic climate."

Well, there might be worse things. Like perhaps ignoring market oversight for years then throwing a hissy fit and flouncing off on holiday when it finally emerges what looked like a booming economy was built on something less stable than sand. ®

High performance access to file storage

More from The Register

next story
Android engineer: We DIDN'T copy Apple OR follow Samsung's orders
Veep testifies for Samsung during Apple patent trial
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
German space centre endures cyber attack
Chinese code retrieved but NSA hack not ruled out
EFF: Feds plan to put 52 MILLION FACES into recognition database
System would identify faces as part of biometrics collection
Big Content goes after Kim Dotcom
Six studios sling sueballs at dead download destination
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
Alphadex fires back at British Gas with overcharging allegation
Brit colo outfit says it paid for 347KVA, has been charged for 1940KVA
Jack the RIPA: Blighty cops ignore law, retain innocents' comms data
Prime minister: Nothing to see here, go about your business
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.