Effort to Create Jobs and Promote Investment in Life Sciences Would Benefit NJ
Bridgewater, NJ, December 16, 2010 — The HealthCare Institute of New Jersey (HINJ) today applauded the introduction of legislation that will provide tax incentives for small and mid-sized businesses to invest in life sciences research and development on a targeted basis.
The Life Sciences Jobs and Investment Act of 2010 (S. 4018) provides an opportunity to enhance medical innovation, life sciences education and job creation in the United States. Companion legislation (H.R. 6165) was introduced in the House in September and is co-sponsored by Rep. Bill Pascrell of New Jersey.
“There are few states that will benefit more from this legislation than New Jersey, and we thank Congressman Pascrell for his vision and for working to preserve life science industry jobs in our state,” said HINJ Senior Vice President Steve Issenman.
The legislation offers businesses two opportunities to create incentives for investment in life sciences research and development. Businesses will either have access to additional tax credits for life sciences research and development or tax advantages to make it more attractive for them to bring their foreign investments back to the U.S.
The Life Sciences Jobs and Investment Act will allow companies to:
- Hire additional scientists, researchers, and comparable personnel engaged in life sciences research in the U.S.;
- Make new investments in research at American universities and post-graduate institutions, state-sponsored incubators, and comparable scientific organizations; and
- Invest in new laboratory and related life sciences research facilities in the U.S.
The legislation would have an especially important impact in New Jersey, where more than 50,000 people are employed by the life sciences industry, contributing tens of billions of dollars to the state’s economy. Adding additional jobs to the life sciences sector is a critical way to rebuild New Jersey’s workforce and economy and keep our state at the forefront of innovation.
American companies invest globally primarily to expand markets, attract talent, and otherwise compete in a global marketplace. These competitive factors, coupled with the high U.S. tax rate, have caused an estimated trillion dollars in foreign earnings to remain abroad, often as “permanently reinvested” earnings.
“In the aftermath of the liquidity crises and Great Recession of 2008 and 2009, it is essential that the U.S. pursue policies that allow — even if only on a temporary basis — the redeployment of overseas earnings to address domestic capital needs,” said David Jory, spokesperson for the Life Sciences Investment Act Coalition. “We should pursue an economic strategy that makes it more attractive for some capital now invested abroad to be invested domestically, provided that the capital is invested in specific projects, such as life sciences jobs, research, and infrastructure, and only if it is paid from funds that are otherwise permanently invested abroad.”
The Life Sciences Jobs and Investment Act of 2010 would provide access in the U.S. to capital otherwise unavailable, and would direct it to targeted activities in life sciences that are known to be important to the future success of our nation.
“This policy will assist in directing funds to the thriving network of research institutions, business incubators, and private companies that contribute to the innovation environment in New Jersey” said Issenman.
Just as a domestic tax policy that provides investment incentives is a critical factor in the success of the biopharmaceutical industry, an equally important factor is ensuring the availability of an educated, skilled workforce that will sustain a competitive and robust bioscience cluster over the long term.
The U.S. has established itself as a leader in the life sciences through the successful collaboration between industry and institutions of higher learning, including universities, academic medical centers, medical research centers, and others. The U.S. must continue to encourage this collaboration and not stand idle while our foreign competitors in the life sciences continue to dedicate financial resources to such arrangements. A domestic tax policy that provides investment incentives for collaborative agreements between life science companies and universities will help develop the future of an educated, science-based workforce.