[Congressional Record Volume 145, Number 90 (Wednesday, June 23, 1999)]
[Extensions of Remarks]
[Pages E1369-E1370]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              INTRODUCTION OF ZERO CAPITAL GAINS PROPOSAL

                                 ______
                                 

                           HON. JENNIFER DUNN

                             of washington

                    in the house of representatives

                        Wednesday, June 23, 1999

  Ms. DUNN. Mr. Speaker, Mr. Matsui and I are introducing a bold 
proposal to zero out capital gains taxes for those who invest in our 
burgeoning high tech industry. We are joined by our colleagues on both 
sides of the aisle who are leaders in the effort to foster a healthy 
economic climate in which our nation's high tech companies can continue 
to thrive.
  The American economy is moving quickly from one dominated by large 
corporations to one whose growth is fueled by emerging entrepreneurial 
high-growth companies. Entrepreneurial companies are today's leaders in 
job creation, technological innovation, and international 
competitiveness. America's future economic well-being lies in the hands 
of today's emerging companies and the central organizing principle for 
our nation's economic policy should be entrepreneurship.
  Over the course of many years, a complex fabric of public policies 
have created the environment in which entrepreneurial firms compete. 
Due to the fact that the public policy needs of this community have not 
been articulated in a united fashion or widely understood by policy 
makers, however, the basic ``building blocks'' used to enhance economic 
growth have not been properly constructed. I rise today to begin to lay 
the foundation for this policy and ensure that the engine that drives 
this economy has access to the fuel it needs to thrive: capital.
  Entrepreneurs are synonymous with jobs. In the last three years there 
has been over a million new jobs created in the high tech sector alone. 
More importantly, the average wage of a high tech job is $53,000 per 
year, 77 percent higher than the private sector as a whole. By creating 
an environment for entrepreneurship to thrive, we also ensure that 
``spin off'' companies develop to foster even greater job creation and 
technological development. Nowhere is this more clearly demonstrated 
than in the biotechnology and computer industries that have grown up in 
my home state of Washington.
  The bill I am introducing today will ensure that these new capital-
intensive small businesses will have the money they need to create 
innovative technologies and create jobs. By raising the Section 1202 
definition of small business from $50 million to $300 million and 
raising the capital gains exclusion from 50% to 100% for both 
individuals and corporations, we can create a climate in which 
individual investors are rewarded for their risky investment and 
entrepreneurs have the tools they need to succeed.
  Capital gains taxes are one of this nation's primary obstacles to job 
creation and technological innovation. Anything to reduce the effective 
or actual rate on capital gains taxes will help put more money in the 
hands of our nation's most enterprising citizens and lift the standard 
of living for everyone.
  In addition to the capital gains provisions in the bill, I am also 
posposing to eliminate Incentive Stock Options from the calculation of

[[Page E1370]]

the individual Alternative Minimum Tax. Today's high tech employers are 
having a difficult time recruiting and retaining skilled professionals 
because of the incredibly high demand for people knowledgeable about 
computers. One of the principal ways employers can retain qualified 
employees is through Incentive Stock Options, which help supplement the 
employee's income while giving them an ownership role in the company. 
Unfortunately, the Alternative Minimum Tax is preventing many employees 
from receiving more compensation and, therefore, is limiting the use of 
ISOs as a retention tools. This bill will fix this problem to ensure 
that both employers and employees can continue to benefit from the 
economic boom being created by the high tech sector.
  Over the course of the next year, I expect a healthy debate over tax 
policy. It is my hope that this bill will put the primary focus of this 
debate where it ought to be: removing incentives to economic freedom 
and entrepreneurship.
  I urge my colleagues to support this effort.

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