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The price of innovation

To the Editors:

Things haven’t been looking good for our economy – or how Americans view the President’s handling of it. A recent Fox News poll found that the economy is the country’s top worry, with 93 percent of voters extremely or very concerned. A stalled economy with voters lacking confidence in the policies of its chief executive: It’s a vicious circle.

But these numbers don’t necessarily spell doom for Democrats. President Obama just unveiled an economic plan that differs from his past proposals in at least one important respect: Republicans will be hard-pressed to complain about it.

I should know. I’ve been a vocal critic, from the center, of Obama’s economic agenda up to this point. But this new plan isn’t just smart politics. It’s smart policy.

The plan’s chief component, improving the research and experimentation tax credit, is a stroke of genius. If Republicans try to criticize this reform, they will look like shallow partisans who don’t want the best for the country in its time of need.

The credit, aimed at encouraging innovation in a host of industries, was first passed in 1981. It comes in two versions: a complex calculation that gives businesses a 20 percent deduction over a base amount, and a straightforward formula that offers a 14 percent deduction above the base.

Obama’s economic plan expands the credit by about 20 percent and raises that simple 14 percent deduction to 17 percent. If you think those numbers sound small, you don’t realize how many billions of dollars are in play.

He’d also make the credit permanent. Over the past three decades, it’s expired and then been renewed many times – but not always. Indeed, legislators let the credit expire between July 1995 - June 1996. And the credit expired again at the end of 2009, and has yet tobe renewed.

That uncertainty is bad for business. Research and development is a complex process that takes years of planning. Equipment must be purchased, and employees must be hired. Sometimes companies hold off on increasing their R&D budgets until they know the credit will be extended.

A study prepared for Congress’ Office of Technology Assessment found a tight relationship between money put toward new research and the level of certainty that R&D tax credits would stick around.

Republicans often argue for a tax code that’s simpler and easier to predict. Obama’s plan delivers that for the R&D credit.

Republicans have frequently complained that Obama’s economic policies sacrifice our economy’s long-term health for short-term gain. But improving the R&D credit is forward-thinking, as it’s particularly beneficial to the industries that are the future of our economy. Consider biotechnology, which stands to have its tax burden lightened under this credit. This industry has been resilient through the troubled economic times of the past few years.

According to a recent study from Battelle, the bioscience sector grew 1.4 percent during the first year of the recession, while overall private sector employment declined 0.7 percent.

Republicans often talk about the importance of incentives to innovation. Making the tax credit permanent would induce a flood of new R&D spending. Academic studies have found that every tax dollar deducted fuels between $1 - $3 in R&D investment.

Increased R&D won’t just make us more prosperous – it will save lives.

Pharmaceutical development has reduced mortality and improved the quality of lives for countless Americans. Agricultural biosciences have allowed farmers to grow more food. Soon, we’ll be talking about how alternative energy technology has reduced our reliance on coal and oil.

But it’s not just educated scientists, researchers, engineers and technicians who will find work. Construction workers, IT professionals, food service workers, accountants and others will get jobs, too.

So, given the merits of the proposal, it’s a slam dunk, right?

Wrong. Republicans and Democrats alike are in election-year mode. That means, even with the economy ailing, they’re looking for issues, not answers.

The President needs to take political steps right now to get over that hump.

Extending the Bush tax cuts – all of them – appears to be nonnegotiable for Republicans. Just this week, Senate Minority Leader Mitch McConnell promised to filibuster any extension that does not continue cuts for high earners.

Obama should meet with the GOP leadership, namely McConnell and House Republican Leader John Boehner of Ohio, and offer a grand bargain: A two-year extension of the Bush tax cuts and larger writeoffs on capital expenditures in return for Republican support.

This credit should attract moderates and more open-minded members of the GOP. Provided anyone’s really listening.

– Douglas E. Schoen, via e-mail

Among the finest

To the Editors:

I was saddened and deeply disappointed at the news that Tina Evans was dismissed from her professorship at Fort Lewis College. She is one of the finest professors on campus and has touched the lives of countless students. Her dedication to the college, the environment, the community of Durango and most of all to the students is unmatched. She was integral in the creation of the Fort Lewis Environmental Studies Department which is now one of the fastest-growing majors on campus. She is an essential faculty and Durango community member and she needs our support. Please do not allow the Fort Lewis College administrators to make a terrible mistake!

– Sincerely, Jerome Bernard, via e-mail

True callings

Dear silly woman who left a note on my car in the Wal-Mart parking lot,

Thank you so much for your eloquent play on words from my bumper sticker in regards to my poor parking job. Last time I checked, if you are inside the lines and not taking a handicapped spot you are pretty much getting it right. If you have enough time and such a strong desire to stop what you are doing, take out a piece of paper, and leave an anonymous crap-talking note, there is really only one take-away: your true calling is parking enforcement. Although, I’m pretty sure they follow code, not whatever you are referencing. Good luck on that and just good luck in general. I think you’re gonna need it.

 – Jamie Bridges, Durango

Angel Saints

They coached the one-armed boy in the rain,

Awakened the sleeping driver,

introduced lovers in a crowd,

revived a comatose child sliding off the gurney,

caught the bullet in the private’s wallet,

barked a warning to the jogging girl,

found the kitten in the fog,

grabbed the toddler from the undertow,

christened the sleeping orphan,

and guided the pen to a solemn truth.

– Burt Baldwin Ignacio




In this week's issue...

January 25, 2024
Bagging it

State plastic bag ban is in full effect, but enforcement varies

January 26, 2024
Paper chase

The Sneer is back – and no we’re not talking about Billy Idol’s comeback tour.

January 11, 2024
High and dry

New state climate report projects continued warming, declining streamflows