CEOs Tempted to Sacrifice R&D Tax Credit for Lower Tax Rate

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It is not often that corporate executives lobby against a popular tax break, but that is, in effect, what is happening as they discuss the research and development tax credit in the context of tax reform. Several top executives tell Congress they would prefer to sacrifice their tax incentives, including the 30-year-old R&D credit, if it allows them to get corporate tax rates significantly lower, but analysts say such a trade-off is unlikely to become a reality. “I can understand why corporate executives would be willing to forgo the credit in favor of lower rates,” says J.D. Foster, a tax scholar at the Heritage Foundation, but “they might want to see exactly what reduction they might get before they get too far out in front.”

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