Worcester Business Journal

wbjournal.com | May 15, 2023 | Worcester Business Journal 21 Tax code is stifling R&D V I E W P O I N T E D I T O R I A L H ere in New England, we are proud of our rep- utation as a global innovation hub. Our region is home to some of the world's most innovative companies, in industries ranging from defense to life sciences to clean energy to technology. ese businesses invest in ground-breaking research and development aimed at saving lives, combating climate change, safeguarding our national security, and more. e U.S. tax code has en- couraged such investments by allowing businesses to fully deduct qualified R&D expenses each year. However, under a provision of the Tax Cuts and Jobs Act of 2017 signed into law by former President Donald Trump, businesses must amortize or deduct these expenses over a period of five years. is provision went into effect for the 2022 tax year. is will ultimately make R&D more costly to conduct. e New England Council firmly believes the new R&D amor- tization requirement will halt and harm our region's continued growth and leadership on the global stage. As a result of this change, the U.S. is now only one of two developed countries requiring the amortization of R&D expenses. Comparatively, our nation's com- petitors, such as China, provide a super deduction for R&D, which drastically increases the allowed amount deducted for companies who previously did not qualify. is change could result in companies relocating R&D facilities and funding out of the country because it will be more costly to do research in the U.S. Fortunately, two members of Congress from New England are leading the bipartisan charge to reverse this harmful change in the tax code. Senator Maggie Hassan (D-NH) has partnered with Senator Todd Young (R-IN) to introduce the American Innovation and Jobs Act. In addition to allowing companies to fully deduct R&D expenses each year, Hassan's bill would raise the cap over time for the refundable R&D tax credit for small businesses and startups, and expand eligibility for the refundable R&D tax credit so more startups can use it. In the U.S. House of Representatives, Congressman John Larson (D-CT) has teamed with Rep. Ron Estes (R-KS) to introduce similar legislation, known as the American Innovation and R&D Competitiveness Act. Similar to the Senate bill, this proposal would allow companies to fully deduct R&D expenses each year. e New England Council is proud to support both of these bills, and we urge others in the business com- munity to encourage Congress to pass this legislation. Doing so will help ensure that the U.S. remains globally competitive, and will drive continued innovation and job creation right here in New England. James T. Brett is the president & CEO of e New England Council, a regional alliance of businesses, nonprofits, and health and educational institutions dedicated to supporting economic growth and quality of life in New England. BY JAMES T. BRETT Special to WBJ A T H O U SA N D WO R D S B Y R A M Ó N L . S A N D O V A L Worcester steps up funding on diversity initiatives James T. Brett I n her February 2022 resignation letter as the City of Worcester's chief diversity officer, Stephanie Williams wrote when it really came down to it, New England's second-largest city treated diversity, equity, and inclusion efforts as extracurricular activities. She added if the City wanted DEI initiatives to truly succeed, the person who would fill her shoes would need more than just a title to overcome the significant institutional barriers that kept her from affecting change. At the time, it appeared the City's DEI efforts would go the way of so many other well-meaning initiatives started in the wake of the May 2020 murder of George Floyd by Minneapolis police. e intentions were noble, and in some cases represented a genuine attempt to address systemic racism, but as time passed, those priorities faded. While some business and public sector leaders have stuck with their DEI initiatives, the hope of creating a community where people of all backgrounds are given equal opportunity to best use their talents has fallen short. e City of Worcester, though, is stepping up its commitment with an important vote of support: increasing the money behind its DEI efforts. In his proposed budget for fiscal 2024, City Manager Eric Batista is calling for a 67% increase in the funding for the Executive Office of Diversity and Inclusion, which will add three positions to the previously two-employee department. Although an increase to an $744,423 annual allocation is a drop in the bucket of the City's $848-million budget, this is still a significant increase from what Williams was operating with when she stepped down. Beyond the significant DEI increase, the budget calls for individual City departments to dedicate time and resources to diversity efforts within their own ranks. is is a significant leap forward from where the City was a year ago and sends a strong signal about Batista's priorities as city manager. When Williams resigned, Batista was serving as assistant city manager and was named as interim chief diversity officer when the position became vacant. Aer then City Manager Edward Augustus le in May 2022, Batista was tabbed as his replacement, becoming the first person of color in the position. He vowed to make diversity, equity, and inclusion a priority. is included an external audit released in September showing the main faults in the City structure, a reorganization to give the Executive Office of Diversity and Inclusion more power in that structure, and seeking an executive search firm to find Williams' replacement. Like with all DEI efforts, none of these bullet points – including the 67% increase in funding – are going to solve the problem, as addressing systemic racism is an ongoing battle requiring sustained resources and focus. Worcester is an incredibly diverse city, and creating opportunities for all its citizens to serve will only make it stronger. We applaud Worcester's efforts in learning from past mistakes and investing in its future. The above Editorial is the opinion of the WBJ Editorial Board. The Viewpoint column, the A Thousand Words cartoon, and the Word from the Web commentary represent the opinions of their authors and do not necessarily reflect the views of WBJ or its staff. WBJ welcomes letters to the editor and commentary submissions. Send them to bkane@wbjournal.com. W W

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