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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 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.