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TABLE 3-3 R&E Tax Claims and US Corporate Tax Returns, 1990-2001

Year

R&E Tax Credit Claims

Current Dollars (millions)

2000 Constant Dollars (millions)

Returns

1990

1,547

1,896

8,699

1991

1,585

1,877

9,001

1992

1,515

1,754

7,750

1993

1,857

2,101

9,933

1994

2,423

2,684

9,150

1995

1,422

1,544

7,877

1996

2,134

2,274

9,709

1997

4,398

4,609

10,668

1998

5,208

5,399

9,849

1999

5,281

5,396

10,019

2000

7,079

7,079

10,495

2001

6,356

6,207

10,388

NOTES: Data exclude IRS forms 1120S (S corporations), 1120-REIT (Real Estate Investment Trusts), and 1120-RIC (Regulated Investment Companies). Constant dollars based on calendar year 2000 GDP price deflator. The R&E credit is designed to stimulate company R&D over time by reducing after-tax costs. Companies that qualify may deduct or subtract from corporate income taxes an amount equal to 20% of qualified research expenses above a base amount. For established companies, that amount depends on historical expenses over a statutory base period relative to gross receipts; startups follow other provisions.

SOURCE: US Internal Revenue Service, Statistics of Income program, unpublished tabulations.

US students for work in a more competitive global economy—as well as to provide the rudimentary skills needed in any economy.

RESTRAINTS ON PUBLIC FUNDING

Public financial support is the backbone of America’s research establishment. In the 1960s and 1970s, university researchers could look to a dozen or so federal sources for grant support, including NSF, NIH, predecessors of the Office of Science in the Department of Energy (DOE),47 the Department of Defense (DOD), the National Aeronautics and Space Administration, and the Department of Agriculture. Funding from those sources, combined with private money, provided flexibility and generosity unmatched in any other nation. Large numbers of today’s senior scientists and engineers owe their ability to pursue their professions to grants from those federal agencies.

47

The Department of Energy Office of Science began as a component of the Atomic Energy Commission.



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