Obama Pushes for Small-Business Tax Breaks - TheStreet

Obama Pushes for Small-Business Tax Breaks

Legislation seeks to remove capital-gains taxes for investments in small companies.
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BOSTON (TheStreet) -- President Barack Obama called for Congress to pass a set of tax breaks and incentives meant to spur growth in start-ups and other small companies, saying "small businesses will help lead this economic recovery."

"The legislation that's being debated right now would eliminate capital-gains taxes for small investment -- for investments in small firms, which will help move capital to these companies across America," Obama said. "It will provide tax relief to small start-ups to encourage folks to open up businesses, as well."

The bills in question -- the Small Business Lending Fund Act of 2010 (H.R. 5297) and the Small Business Jobs Tax Relief Act of 2010 (H.R. 5486) -- are due for consideration by the House Committee on Rules on Monday afternoon.

"Even though we are in the process of digging ourselves out of the recession, we're still in a pretty deep hole," Obama said. "Credit is still less available than it should be, particularly to small businesses."

Meanwhile, however, venture capitalists are upset over last month's passage of another bill (H.R. 4213), which aims to increase taxes on carried interest received by managers of private equity funds that invest in startups -- essentially treating it more like income and less like capital gains.

"The House of Representatives failed to recognize the serious economic consequences of their actions," said Mark Heesen, president of the National Venture Capital Association, in a statement. "It is both ironic and disconcerting that legislators can profess commitment to creating jobs, and then discourage the type of long-term investment which has been a proven job creator for the last century."

The bill is under consideration by the Senate, which may vote on it next week.

-- Reported by Carmen Nobel in Boston.