TechNet Backs Corporate Tax Credit

Legislation that would offer a permanent tax credit for corporate research and development got a political boost Tuesday when it was endorsed by the Technology Network.

TechNet, a Palo Alto-based lobbying group that has enjoyed growing success in promoting the high-tech industry’s political agenda, announced support for a bill scheduled for introduction in the House of Representatives today by Robert T. Matsui (D-Sacramento) and Nancy L. Johnson (R-Conn.).

Similar legislation is slated for introduction in the Senate by Orrin G. Hatch (R-Utah) and Max Baucus (D-Mont.).

“We want to give companies the ability to plan into the future. That’s important because most research and development programs require many years,” said Jim Bonham, spokesman for Matsui.

In the past, tax credits have been offered one year at a time because current budget rules require spending cuts to offset revenue losses--a process that is easier to manage year by year, Bonham said.

“Innovation [and investment] in technology, more than any other factors, are the engines that drive this new economy forward,” and a lack of predictable tax relief stifles innovation, said John Doerr, a TechNet co-founder. Doerr is a major Democratic political donor and a leading Silicon Valley venture capitalist.

Silicon Valley will also throw its political clout behind increased government funding of university-based R&D.;

Doerr warned that a decline in research grant funds is partly to blame for a shortage of qualified scientists and engineers for American business, calling such grants “long-term venture capital for the entire nation.”