[Congressional Record Volume 147, Number 22 (Thursday, February 15, 2001)]
[Senate]
[Pages S1502-S1503]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Daschle):
  S. 364. A bill to amend the Internal Revenue Code of 1986 to expand 
the applicability of section 179 which permits the expensing of certain 
depreciable assets; to the Committee on Finance.
  Mr. DORGAN. Mr. President, today I'm reintroducing several bills that 
are needed to fix glaring problems in our Internal Revenue Code.
  Clearly, the issue of tax cuts will be the subject of extensive 
debate in the coming months. I think a responsible new tax relief plan 
could be crafted to ease the tax burden on working families and others 
who need it. I also believe that if the expected surpluses materialize, 
a significant part should be used to pay down the federal debt.
  But, as we move forward with this debate about new tax breaks, I 
think Congress needs to remember that there are a number of tax 
fairness matters pending from previous years that we must address 
without any further delay.

[[Page S1503]]

  First, when Congress enacted a new $500,000 capital gains exclusion 
for home sales in 1997, it offered a good deal to those families who 
live in urban areas affected by rising home and land prices. 
Unfortunately, this provision offers little or no benefits for family 
farmers because their farm homes are part of the larger farmstead. By 
itself, the farmhouse often has little value in relation to the 
surrounding farmland and buildings. This means that farmers who are 
selling the whole farm because they are retiring or who are being 
forced out of business because of the downturn in the farm economy may 
face a hefty tax bill at a time they can least afford it.
  Legislation that Senator Hagel and I are introducing today recognizes 
the economic realities of farming and extends the benefit of the 
$500,000 capital gains tax exclusion to farm families. Specifically, 
our legislation would expand the $500,000 capital gains exclusion for 
home sales to cover family farmers who sell their farmhouses or 
surrounding farmland, so long as they are actively farming prior to the 
sales.
  We have introduced virtually identical legislation in the past. Our 
approach has garnered substantial bipartisan support from most of our 
colleagues. If we enact a major tax bill this year, we believe it ought 
to include language to correct this capital gains tax problem that many 
of our nation's farmers urgently need fixed.
  Second, I'm introducing legislation along with Senators Johnson, 
Daschle and others to immediately eliminate the disparity between sole 
proprietors and their large corporate competitors in the tax treatment 
of their health insurance costs. Under current federal tax law, we tell 
our biggest corporations that they can deduct 100 percent of their 
health insurance costs, while we say to our nation's sole proprietors 
that they can deduct only 60 percent of these same costs. Almost 
everyone agrees that this circumstance is indefensible and needs to be 
remedied. Current law fixes this problem by 2003, but small business 
owners should not have to wait. Congress should act now to give them 
the full deduction.
  This legislation addresses this inequity facing family farmers, 
ranchers, and other self-employed individuals by permitting them to 
deduct 100-percent of their health insurance costs beginning this year. 
The health of a family farmer or small business owner is just as 
important as the health of an officer of a large corporation and our 
tax laws should reflect that simple fact now.
  The third bill I'm introducing today addresses what I believe is a 
major flaw in the current federal income tax expensing provision that 
hinders many small businesses from making needed building improvements. 
Under current law, small businesses generally can deduct immediately up 
to $24,000 in qualifying purchases of equipment and machinery. But they 
must depreciate over 39 years the costs of any storefront or other 
structural building improvements, even if those improvements are 
crucial to the business or to the maintenance of a Main Street.
  This legislation tells the local drug store, shoe store or barber 
shop, which doesn't have much need for equipment purchases but does 
need to improve the storefront or interior, that it should be able to 
deduct the costs of such improvements, rather than be forced to 
depreciate them over nearly four decades. Specifically, my bill expands 
the current $24,000 expensing provision to cover investments in 
depreciable real property. The bill also increases the expensing amount 
to $25,000, which is currently scheduled to occur by the year 2003.
  There are Main Streets across this country that were built or 
refurbished decades ago and now need investments and improvements. Our 
federal tax laws ought to assist small businesses to make such 
improvements, and my legislation is a simple way to accomplish that.
  The Senate unanimously agreed to an amendment I offered to a larger 
tax bill last summer that would have made the changes I have proposed 
in the three bills I introduce today. Unfortunately, none of these 
provisions was included in the final version of that tax bill or other 
legislation before the Congress adjourned last year.
  Therefore, I would urge my Senate colleagues to cosponsor each of 
these bills and work with me to get them added to any tax package 
passed by the Congress this year.
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