Pink Sheet is part of Pharma Intelligence UK Limited

This site is operated by Pharma Intelligence UK Limited, a company registered in England and Wales with company number 13787459 whose registered office is 5 Howick Place, London SW1P 1WG. The Pharma Intelligence group is owned by Caerus Topco S.à r.l. and all copyright resides with the group.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction

VENTURE CAPITAL GAINS TAX REDUCTION BILL FOR START-UPS

Executive Summary

VENTURE CAPITAL GAINS TAX REDUCTION BILL FOR START-UPS to be introduced by Rep. Matsui "within 30 days," the California Democrat said in a May 15 luncheon address to the Association of Biotechnology Companies' annual meeting in Washington, D.C. Matsui and Rep. Moody (D-Wis.) are preparing what is being called a "targeted capital gains" bill that would reduce the capital gains taxes owed by investors in small start-up firms. Sen. Bumpers (D- Ark.) reportedly is drafting a companion bill in the Senate. As currently envisioned, the proposal would reduce the tax liability on capital gains by 50% for stock investments held for five years or more. The credit would apply only to seed or venture capital investments. Matsui and Moody are still considering how to define "small" companies in terms of total investment funding and assets, but the bill will include a venture capital cap, above which investors in start-ups would not receive the 50% tax break. "We are hopeful that we will get some support for [the bill]," Matsui commented at the ABC luncheon. However, he added: "I don't expect it to happen this year." Matsui urged ABC to get involved in supporting the proposal. "What we need to do is to get a number of people talking about this so that we can gain some momentum for 1992." While not resolving all of small businesses' concerns about capital gains, the bill may be a stop-gap measure following the rejection of previous capital gains measures by Congress. Matsui noted that the Bush Administration's support of the issue has been waning, and that capital gains is not likely to be reintroduced either this year or in 1992. Observing that "many people now view the issue of capital gains as a rich/poor issue," Matsui said that Congress "must refocus this debate and talk about how the cost of capital must be reduced so that we can raise the standard of living of the average citizen." Matsui also discussed the R&D tax credits, which are scheduled to expire this year. He said that House Ways & Means Committee Chairman Rostenkowski (D-Ill.) and Sen. Bentsen (D-Tex.), chairman of the Senate Finance Committee, have indicated that there will be no action on taxes until September. However, Matsui predicted that renewal of the R&D tax credit along with 11 other tax provisions may be "difficult." Under the 1990 budget agreement, extension of the tax provisions would require Congress to find $ 2 bil. in revenues to pay for the R&D credit in fiscal 1992. "It could be a little more tenuous as to whether these provisions will in fact pass," he remarked. "It is very unlikely that we are going to get any kind of revenue increase to offset that $ 2 bil. loss."

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

Latest Headlines
See All
UsernamePublicRestriction

Register

PS019203

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel