[Congressional Record Volume 146, Number 10 (Tuesday, February 8, 2000)]
[Extensions of Remarks]
[Pages E94-E95]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         INTRODUCING THE INSTALLMENT TAX CORRECTION ACT OF 2000

                                 ______
                                 

                           HON. WALLY HERGER

                             of california

                    in the house of representatives

                       Tuesday, February 8, 2000

  Mr. HERGER. Mr. Speaker, I am pleased today to join with my good 
friends and colleagues, Mr. Sweeney and Mr. Tanner, to announce the 
introduction of our bipartisan legislation--the Installment Tax 
Correction Act of 2000.
  It is no secret that small business is the engine driving our current 
economic success. America's small businesses provide the 
entrepreneurship and innovation to keep our economy moving forward. 
Unfortunately, many small business owners now face a tax burden which 
threatens to erode the value of their business and which has erected an 
unnecessary barrier to small business ownership. The legislation we are 
introducing today is necessary to correct a provision of the tax code 
which is imposing a serious burden on thousands of small businesses 
across America.
  Mr. Speaker, most small business owners have chosen to use the 
installment sales method when selling their business because

[[Page E95]]

bank financing is often not available. Under an installment sale, the 
buyer makes a down payment up front and pays for the rest of the 
business over a period of years. Such sales grant greater flexibility 
to both the buyer and seller and have enabled thousands of Americans, 
who would otherwise be unable to buy a business, the opportunity to 
make their dream of small business ownership a reality.
  Last year the President proposed, and Congress accepted as part of 
larger tax package, a provision to repeal the use of installment sales 
for certain taxpayers. This provision appeared to target larger 
businesses when they sold a particular asset or assets. Small business 
groups, Congress, and even the administration did not expect the 
serious effect this provision would have on small businesses across 
America. Unfortunately, the unintended consequences are now a reality 
and it is our job to fix the problem. Our legislation will do just 
that, by once again allowing businesses to make use of installment 
sales.
  Mr. Speaker, this is not a theoretical discussion. The burden being 
felt by small business owners across America is all too real. It is 
affecting taxpayers such as Harold and Mary Owens who own a small 
family business in my district in Redding, CA. They have built up their 
business through 12 years of hard work and are counting on the sale of 
this business to provide for their retirement. To pull the rug of 
retirement security out from under them at this time is simply wrong. 
And this is just one example out of the thousands of businesses each 
year which will see the value of their businesses eroded if our 
legislation is not enacted.
  I was hopeful that the President would propose a solution to this 
problem in his fiscal year 2001 budget, released just yesterday. While 
I am disappointed that the President's budget does not address this 
important issue, I remain hopeful that all of us--both Republican and 
Democrat--will work with the administration to fix this situation on 
behalf of our Nation's small businesses.
  I am pleased by the support our effort has received so far. The 
legislation we are introducing has more than 70 bipartisan cosponsors. 
Furthermore, a coalition of more than 50 groups--including the National 
Federation of Independent Business, the US Chamber of Commerce, the 
National Association of Realtors, and the National Taxpayers Union, 
among others--has made enactment of our legislation a top priority this 
year.
  Mr. Speaker, we owe it to small businessmen and women across America 
to have a tax code which treats them fairly. It is imperative that we 
pass the Installment Tax Correction Act this year, and I urge all my 
colleagues to join this worthy, bipartisan effort.

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