This book examines a key element of current federal support for manufacturing: tax benefits. More specifically, it identifies and describes current federal tax preferences that offer significant benefits for small and large manufacturing firms. Additionally, technological innovation is a major driving force in long-term economic growth, and research and development (R&D) serves as the lifeblood of innovation. The federal government encourages business R&D in a variety of ways, including a tax credit for a company's increases in spending on qualified research above a base amount. The current status of the tax credit is described, as is its legislative history, the policy issues it raises and legislation in the 112th Congress to modify or extend it.