David Thomas: “Given my statutory responsibility (15 USC Sec. 634b(4)) to determine the impact of the taxes on small businesses and…”

“Given my statutory responsibility (15 USC Sec. 634b(4)) to determine the impact of the taxes on small businesses and advise Congress, I have been asked to analyze the impact on small businesses of the "Contract With America Tax Reform Act of 1995" which is scheduled to come before the House of Representatives this week for consideration. Specifically, section 6301 of H.R. 1327, the Tax Fairness and Deficit Reduction Act of 1995, creates a 50 percent capital gains exclusion for individuals but, in so doing, repeals the special small business capital gains tax incentive in the existing law (P.L. 103-66, Sec. 13113). This will have the effect of raising the taxes of future investors in qualifying, high growth, small businesses from the previous maximum rate of 14 percent to the new rate of 19.8 percent. This may be the only category of taxpayer to have its taxes raised under the capital gains provisions of the proposal.”