The deduction is cut by the research credit
What the document says“The domestic research or experimental expenditures (as defined in section 174A(b)) otherwise taken into account as a deduction or charged to capital account under this chapter shall be reduced by the amount of the credit allowed under section 41(a).”
The section rewrites section 280C(c)(1) of the Internal Revenue Code of 1986 so that domestic research or experimental expenditures otherwise deducted or charged to capital account are reduced by the research credit allowed under section 41(a), and rewrites section 41(d)(1)(A) to point to expenditures treated as domestic research or experimental expenditures under the new section.
What the document actually says“The domestic research or experimental expenditures (as defined in section 174A(b)) otherwise taken into account as a deduction or charged to capital account under this chapter shall be reduced by the amount of the credit allowed under section 41(a).”
The research costs a firm claims are cut. They are cut by the amount of the research credit.
That stops the same cost getting two breaks. The credit is set out in the tax code. That code is not indexed here.
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