[Congressional Record Volume 145, Number 42 (Wednesday, March 17, 1999)]
[Extensions of Remarks]
[Page E458]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 LEGISLATION TO HELP THE HORSE INDUSTRY

                                 ______
                                 

                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                       Wednesday, March 17, 1999

  Mr. WELLER. Mr. Speaker, I join with my colleagues, Representatives 
Karen Thurman, Ron Lewis and Joel Hefley to introduce legislation that 
will end the unfair treatment of horses under the federal tax laws 
compared to other livestock and business assets. Under present law, 
gain from the sale of virtually every capital asset--except horses--
qualifies for capital gain treatment once it has been held for one 
year. The holding period for horses, however, is two years. We think 
this unfair to an important industry.
  There is no reason to treat horses differently than other capital 
assets. The horse industry provides sport, recreation and entertainment 
for millions. This industry has an economic impact on the U.S. economy 
of $112 billion and supports 1.4 million jobs. It pays $1.9 billion in 
taxes to all levels of government. In my state of Illinois the horse 
industry has an economic impact of $3.8 billion and supports 50,000 
jobs. However, the racing and breeding industry has struggled over 
recent years because of the proliferation of various gaming venues. As 
a result, race tracks have not been able to pay purses large enough to 
cover the expense of racing a horse. Making the capital gains holding 
shorter will give some help to these owners who are suffering because 
purses are too low.
  This provision was apparently put in the tax code in 1969 as an anti-
tax shelter provision. Since then there have been numerous changes in 
the tax laws, in particular the passive loss limitations, which have 
eliminated virtually all so-called ``tax shelters.'' This tax provision 
has discriminated against Illinoisans and others for long enough. 
Whatever the rationale was for making the holding period for horses 
different, it has outlived its usefulness.
   It is time to change the tax laws in this area. I welcome other 
members to join us in this effort by cosponsoring this important 
legislation.

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