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U.S. House votes to revive expired research tax credit

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The U.S. House of Representatives voted Friday to revive the tax credit for corporate research, expand it and make it permanent.

The 274-131 vote follows calls to restore the credit by a coalition of companies including Indianapolis-based Eli Lilly and Co. and Texas Instruments Inc.

The measure faces significant obstacles before it can become law, including a veto threat from President Barack Obama. All except one Republican voted for the bill; Democrats were divided, with 62 in favor of it and 130 opposed.

The research credit was first enacted in 1981. Lawmakers said the lapse-and-revive cycle of the past 33 years has prevented companies from relying on it and thwarted its incentive effect.

“Businesses can’t grow and invest when the tax code is riddled with instability and uncertainty,” Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said on the House floor Thursday. “We’ve fallen far behind. Other countries are moving past the United States.”

The bill heads to the Senate, where lawmakers are taking a different approach. The differences between the House and Senate may take months to resolve.

Instead of separate votes to make individual tax benefits permanent, the Senate Finance Committee last month backed a single measure extending the research credit and dozens of other breaks through the end of 2015.

GE, Citigroup

Other tax benefits in the Senate measure include the production tax credit for wind energy and a rule that lets General Electric Co., Citigroup Inc. and other companies defer U.S. taxation on overseas financing income.

That bill is scheduled to reach the Senate floor next week. There’s a “big question mark” about whether it will pass because of a dispute between Democrats and Republicans over which amendments, if any, should be allowed, said Richard Durbin of Illinois, the second-ranking Senate Democrat.

The House vote involves contradictions for each party.

Republicans, who say Democrats’ proposed extension of unemployment insurance must be offset with spending cuts elsewhere, supported the tax bill though it would add $155.5 billion to the budget deficit over the next decade. The lack of offsets was part of the Obama administration’s rationale for the veto threat.

“When you put it on the credit card, at the end of the day somebody is paying for it,” said Rep. Chris Van Hollen, a Maryland Democrat. The Senate bill contains no provisions to offset its cost.

Democrats, who had supported extending the tax credit in prior years without covering its costs, voted against the bill Friday even though a number of them co-sponsored it.

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  • So Consistent, these "Conservatives"!
    Tax cuts for business (at any cost, no need to pay for it!) not a nickel for working people to be retrained or given extended UI through the worst jobs-economy ever, even when its paid for.
  • Corporations say "jump"
    And the GOP asks "how high"? Interesting how the GOP is willing to provide tax credits to busineses but not extend unemployment insurance and raise the mimum the wage for workers. Hmm...

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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