Research Tax Credit: Current Law and Policy Issues for the 114th Congress [March 13, 2015] [open pdf - 881KB]
"Economists have gained notoriety for their differences of opinion on a variety of policy issues. Notable examples include the long-term economic effects of large, permanent tax cuts; the impact of illegal immigration on domestic wages; and the best way to achieve price stability, full employment, and greater income equality. But on the issues of the impact of technological innovation on economic growth in the long run and the proper role of government in the development of new technologies, there is relatively little dissent among practitioners of what is known as the dismal science. In general, economists agree that technological innovation has accounted for a major share of long-term growth in real per-capita income in the United States.[…] The federal government supports research and development (R&D) in a variety of ways. Direct support comes mainly in the form of research performed by federal agencies and federal grants for basic and applied research and development intended to support concrete policy goals, such as protecting the natural environment, exploring outer space, advancing the treatment of deadly diseases, and strengthening the national defense. Indirect support is more diffuse. The chief sources are federal funding of higher education in engineering and the natural sciences, legal protection of intellectual property rights, special allowances under antitrust law for joint research ventures, and tax incentives for business R&D investment. [...] This report examines the current status of the research and experimentation (R&E) tax credit, describes its legislative history, discusses some important policy issues raised by it, and identifies legislative proposals in the 113th Congress to extend or otherwise modify the credit. It will be updated to reflect significant legislative activity and other developments affecting the credit's status."
CRS Report for Congress, RL31181