Against all odds, a bipartisan House group is pushing tax benefits for biotech as well as pharma and medical device companies.
The legislation, as currently envisioned, is two-pronged, says Bloomberg. It would offer life sciences businesses a doubling of credit to 40% for the first $150 million of research, or the opportunity to bring to the U.S. as much as $150 million annually in overseas profits at a tax rate of just 5.25% percent, on the condition the money is channeled into further research.
Citizens for Tax Justice labeled the proposal "a wasteful subsidy to business," reasoning that the benefits would pay for research that would be done anyway.
Nonetheless, the proposal appears to have a built-in tie-breaker. Main sponsor Rep. Devin Nunes (R-CA) and co-sponsors Jim Gerlach (R-PA) and Bill Pascrell Jr., (D-NJ) sit on the tax-writing Ways and Means Committee. The measure now awaits the committee's consideration.
The bill comes as a long slump in venture capital appears to be easing, a sign favorable to the proponents. But there's no indication in the story that the effect on investors of yesterday's biotech stock meltdown have been taken into account, a point for opponents.
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