Re: Cold Fusion Discussion

[paul o johnson <pojhome@FLASH.NET>]

Lois Breur Krause wrote:

> Some of us remember a time when private industry funded most research,
> before the government took over through taxation.(The corporate tax
> structure apparently changed sometime in the early 70's where R&D funding
> was no longer shielded, or had to show a short term profit incentive to be
> shielded from taxes)

In a previous life, I was for 30 years intimately involved with so-called
industrial-funded research. All companies who contract with the government to
develop systems perform research under the name Internal R&D (or IR&D). Such
research is controlled internally; the companies choose the topics, perform and
manage the research, and fund it from their own IR&D budget.

But this funding is not from the companies' profits, either before or after the
profits are taxed. Rather, the moneys accumulate under the banner of General &
Administrative (G&A) expenses, non-taxable cost items that are added to every
government contract.

I know of very few government contractors who pay for any of their research out
of profits. They expect Uncle Sugar (read you and me) to pay directly for the
research they do.

poj