[Congressional Record Volume 157, Number 11 (Wednesday, January 26, 2011)]
[Senate]
[Pages S289-S290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself and Ms. Snowe):
  S. 208. A bill to amend the Internal Revenue Code of 1986 to extend 
the 100 percent exclusion for gain on certain small business stock; to 
the Committee on Finance.
  Mr. KERRY. Mr. President, for years I have worked to encourage 
investment in small businesses. We all realize that small businesses 
are the backbone of our economy. As the economy continues to recover, 
we must help small businesses have access to capital.
  Many of our most successful corporations started as small businesses, 
including AOL, Apple Computer, Compaq Computer, Datastream, Intel 
Corporation, and Sun Microsystems. As you can see from this partial 
list, many of these companies played an integral role in making the 
Internet a reality.
  Investing in small businesses is essential to strengthening our 
economy. Not only will investment in small businesses spur job 
creation, it will lead to new technological breakthroughs. We are at an 
integral juncture in developing clean energy technology. I believe that 
small businesses will repeat the role it played at, the vanguard of the 
computer revolution--by leading the Nation in developing the 
technologies which result in clean energy. Small businesses already are 
at the forefront of these industries, and we need to do everything we 
can to encourage investment in these small businesses.
  Today, Senator Snowe and I are introducing legislation to extend the 
zero capital gains rate on certain small business stock and the 
exception from minimum tax preference treatment through 2012. During 
the past two Congresses, Senator Snowe and I introduced legislation 
which would make permanent changes to the 50 percent exclusion for gain 
on small business stock.
  Back in 1993, I worked with Senator Bumpers to enact legislation to 
provide a 50 percent exclusion for gain for individuals from the sale 
of certain small business stock that is held for 5 years. Since the 
enactment of this provision, the capital gains rate has been lowered 
without any changes to the exclusion. Due to the lower capital rates, 
the 50 percent exclusion no longer provided a strong incentive for 
investment in small businesses.
  Our efforts to improve this provision have been successful. The 
American Recovery and Reinvestment Act temporarily increased the 
exclusion to 75 percent. The Small Business Jobs Act

[[Page S290]]

of 2010 temporarily increased the exclusion to 100 percent and the 
alternative minimum tax, AMT, preference item for gain excluded under 
this provision would be temporarily eliminated. These provisions were 
further extended through 2011 by the Tax Relief, Unemployment Insurance 
Reauthorization, and Job Creation Act of 2010. The legislation that I 
am introducing would extend these provisions through 2012.
  Extending the zero capital gains rate on small business stock through 
2012 would put this provision on equal footing with the extension of 
the lower capital gains rate included in the Tax Relief, Unemployment 
Insurance, Reauthorization, and Job Creation Act of 2010.
  I believe that the additional improvements should still be made to 
the exclusion for small business stock and I will continue to work on 
this issue. As Congress begins its work on tax reform, encouraging 
investment in small businesses should be a goal of tax reform.
  I urge my colleagues to support an extension of the zero capital 
gains rate and I look forward to working on tax reform which encourages 
job creation and investment in small businesses.

                          ____________________