R&D Tax Credit Falls Victim to Republican Vote-Payoff-Orama

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.

Everybody loves the R&D tax credit. But when you pass a tax bill so fast that no one knows what’s really in it—and then top it off with a 24 hour gold rush of pet giveaways for all your favorite pals—accidents can happen. Like effectively getting rid of the R&D tax credit:

Late Friday, just hours before the Senate voted 51-49 to pass the bill, which included about $1.4 trillion in tax cuts, Republicans decided to preserve the corporate alternative minimum tax instead of repealing it as planned. The change helped them provide money for other priorities lawmakers demanded to include in the legislation.

….The alternative minimum tax is a parallel tax system with low rates and few tax breaks. Under the present system, the corporate alternative minimum of 20% is rarely applicable to business filers, who end up paying a higher 35% tax rate and can have lower effective rates by claiming breaks that aren’t affected by the AMT. But the corporate rate is now proposed to be 20%, so the overhaul could drive many companies into the AMT—and force them to lose some of their breaks in the process.

….Murray Energy Corp., an Ohio-based firm and the largest privately held U.S. coal-mining company, complained that the AMT decision and the Senate’s tougher limits on interest deductions made a “mockery out of so-called tax reform.”

Robert Murray, the company’s chief executive officer, said the Senate tax plan would raise his tax bill by $60 million. “What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Mr. Murray said Sunday. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.

Pshaw. There’s no longer any need to provide incentives for R&D. The Republican tax bill will unleash a tidal wave of business activity, and all that extra profit will be plowed back into business growth. It will not be used for stock buybacks and higher dividends. That’s just liberal class warfare talk. I’m sure Mr. Murray has nothing to worry about.

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate