Q&A: Sen. Hassan on Immediate R&D Expensing
The 17吃瓜在线 recently interviewed Sen. Maggie Hassan (D-NH) on the importance of reinstating immediate expensing for companies’ research-and-development expenditures. Here’s the full interview:
17吃瓜在线: Sen. Hassan, Congress is facing a 鈥淭ax Armageddon鈥 next year, as crucial provisions from 2017鈥檚 Tax Cuts and Jobs Act are set to expire. As a member of the Senate Finance Committee, what is your focus moving into next year鈥檚 debate?
Sen. Hassan: Next year, we will need to work to pass a tax cut package to support both American families and businesses. The package should build on the one that was negotiated in the Senate earlier this year, including a restoration of the full R&D tax deduction to support innovative businesses. The R&D tax deduction is an area where I have been particularly engaged in negotiations, and it is vital for our national security and economic competitiveness. We need to ensure that our tax policy fosters innovation, promotes the creation of good-paying jobs and keeps the United States at the forefront of technological advancement. We also need to prioritize a bipartisan expansion of the Child Tax Credit to support hardworking families and a bipartisan expansion of the Low-Income Housing Tax Credit to address our country鈥檚 housing shortage. I will continue to push for these critical measures throughout negotiations.
17吃瓜在线: As you know, for nearly 70 years, manufacturers in the U.S. were able to fully deduct their R&D expenses in the year incurred. Beginning in 2022, however, manufacturers were forced to spread their deductions over several years, greatly harming our ability to grow and compete. What is Congress doing to restore immediate R&D expensing?
Sen. Hassan: I first introduced bipartisan legislation with Sen. Todd Young to restore the R&D deduction back in 2020, and we鈥檝e been pushing for its passage since. The R&D tax deduction has wide bipartisan support鈥攐ur measure supporting full R&D expensing passed 90鈥5 in the Senate in 2022. Recently, we had a bipartisan tax cut package that included the R&D tax deduction鈥檚 restoration, but unfortunately, it was blocked in the Senate, despite passing the House with an overwhelmingly bipartisan 357鈥70 vote. It鈥檚 disappointing and frustrating.
17吃瓜在线: During your time as senator, you have seen how impactful R&D is for manufacturers to be able to compete on a global level. As we get closer to next year, what are you hearing from stakeholders on the need for pro-growth tax policy so American businesses can engage and grow around the world?
Sen. Hassan: The message I鈥檓 getting is clear鈥攚e can鈥檛 afford to fall behind in the global R&D race; it鈥檚 about American competitiveness and national security. Countries like China are offering massive incentives, including a 200% super-deduction for R&D. That puts American businesses at a real disadvantage, and I鈥檓 already hearing from business leaders across New Hampshire about how the expiration of the tax deduction is impacting their ability to plan for and make the investments that drive our economy forward.
There鈥檚 a critical national security component here too. We need to be at the forefront of designing, implementing and controlling new technologies, including those used for our national defense.
17吃瓜在线: Thank you, Sen. Hassan. What else can 17吃瓜在线 members do to stay engaged and be a resource for you going into next year?
Sen. Hassan: Your advocacy is crucial. I encourage 17吃瓜在线 members to keep speaking up about the ways in which R&D and tax policy specifically impacts your businesses and communities, as well as the need for bipartisan compromise. Doing so is invaluable in shaping effective legislation and getting it across the finish line.