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36 Tax Features 1 (1992-1993)

handle is hein.tera/taxfeaturs0036 and id is 1 raw text is: Ta Fonion                                                    Vol 36 . I Jnay19

Moscow Business
Conference Addresses
International Taxation
and Basic Economics
in Former Soviet Union
Over 700 business men and women and gov-
ernment officials, 300 American and 400 Soviet
and Russian, attended the Moscow Business
Conference, which the Tax Foundation co-

Tax Foundation Co-
Cbairman James C
Miller III applauds
Russian President Boris
Yeltsin after his
presentation in the Great
Hall of the Kremlin
Palace.

Tax Foundation
Moscow
Conference   1
Front
Burner      1
Corporate Tax
Compliance
Seminar      2
Corporate
Integration
Study        4
Foundation
Message      7

hosted at the Kremlin December 1-7. Founda-
tion Cochairman James C. Miller III led the
American participants who included Ambassa-
dor Robert Strauss, Secretary of Labor Lynn
Martin, Deputy Secretary of the Treasury John
Robson, publisher of Fortune magazine James
Hayes, and former Secretary of Transportation
James Burnley. Soviet and Russian participants
included President Boris Yeltsin, President
Mikhail Gorbachev, Yegor Gaidar, Deputy Prime
Minister for Economic Affairs, Russian Repub-
lic; and Arkady Volsky, Deputy Chairman,
Committee for the Management of the National
Economy.
Historic developments during the week of
the conference including the floating of the
ruble and the announcement as the conference
adjourned on Sunday, December 7, of the new
Commonwealth's formation. A small group
from the conference met Saturday with
Gorbachev who was quite bitter about the
failure of the Republics to enter into the Union
Treaty.
A positive attitude towards Western invest-
ment was underscored by President Yeltsin's
See Moscow on page 7

.1

Tax Policy
Should Attract
Venture Capital
to Small
Business
Shortly before Con-
gress left town last
year, I introduced
legislation to re-
duce the capital Sen. Dale Bumpers
gains tax rate on
long-term investments in American small
business ventures. I have been joined in
this legislation by 44 co-sponsors in the
Senate, and companion legislation has been
introduced in the I-louse of Representatives by
Representatives Bob Matsui (D-CA), Jim Moody
(D-WI), and Bill Gradison (R-01-).
Unlike other capital gains proposals, my
legislation is targeted specifically to new, long-
term investments in high-risk small businesses.
Moreover, to qualify for the incentive, invest-
ments would have to be held for at least five
years.
The legislation I have proposed would set
up incentives for two categories of investment:
investments in the stock of firms with $100
million or less in paid-in capital, and invest-
ments in firms with $5 million or less in paid-in
capital.
For direct investment in the stock of firms
with $101) million or less in paid-in capital, there
generally would be a 50 percent tax deduction.
The maximum capital gains tax rate would be
14 percent for taxpayers in the 28 and 31
percent personal income tax brackets. The
maximum rate for individuals in the 15 percent
tax bracket would be 7.5 percent. In order to
qualify for these reduced tax rates, stock would
have to be held for at least five years. The
excluded gains would be a tax preference item
for purposes of the minimum tax.
For investments in firms with $5 million or
less in paid-in capital, the capital gains tax rates
would be reduced further on a sliding scale if
See Bumpers on page 2
Senator Dale Bumpers, Arkansas Democrat, is
Chairman of the Senate's Small Business
Committee.
The opinions expressect in the Front Burner are not
necessarily those of the Tax Foundation. Editorial
replies are encouraged,

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