PRESS RELEASE

PRESS RELEASE

HARRIS & HARRIS GROUP, INC. DECEMBER 20, 2005
111 WEST 57th STREET, SUITE 1100
NEW YORK, NEW YORK 10019 CONTACT: CHARLES E. HARRIS

NASDAQ/NMS SYMBOL: TINY TEL. NO. (212) 582-0900


HARRIS & HARRIS GROUP DECLARES DEEMED DIVIDEND


Harris & Harris Group, Inc., announced today that its Board of
Directors, in accordance with rules governing a Regulated Investment
Company ("RIC") under Sub-Chapter M of the Internal Revenue Code, has
declared a designated undistributed capital gain dividend (also known
as a deemed dividend) for 2005.


As of December 20, 2005, the deemed dividend is estimated to be
$23,220,067 or $1.1186973 per share. This estimate is subject to
change in the event that additional capital gain or loss events occur
before December 31, 2005. It is payable to shareholders of record as
of December 31, 2005. Shareholders of record on the record date will
be provided with the exact amount of the deemed dividend attributable
to their shares by their stock broker, if their shares are held in
electronic format, or by The Bank of New York, if their shares are
held directly. This information will be reported on IRS Form 2439.


The following simplified example illustrates the tax treatment under
Sub-Chapter M of the Internal Revenue Code for the Company and its
shareholders with regard to the estimated $23,220,067 or $1.1186973
per share net long-term capital gain to be retained by the Company and
designated as an undistributed capital gain or deemed dividend:


1. The Company will pay a corporate-level federal income tax of 35%
or $8,127,024 on the undistributed capital gain, or approximately
$0.391544059 per share, on behalf of shareholders.


2. Shareholders will increase their cost basis in their stock by
approximately $0.72715325 per share.


3. Individual shareholders who are taxable at the highest marginal
rate will pay a 15 percent federal capital gains tax on 100 percent of
the undistributed capital gain of $1.1186973 per share (or
approximately $0.16780460 per share in tax). Other taxable
shareholders will pay tax on the undistributed capital gain at their
applicable rates.

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4. All shareholders will receive a federal tax credit equal to the
tax paid by the Company on the undistributed capital gain, or
approximately $0.391544059 per share. Taxable shareholders can use
that credit to offset their federal tax liabilities for 2005 and can
claim a refund to the extent of any unused credit. Shareholders which
hold their shares in tax-deferred accounts can receive a refund from
the IRS of the taxes paid on their behalf by the Company on the deemed
dividend by having their custodians file IRS Form 990T with the IRS.
(It typically takes several months for custodians to receive the
refund and deposit it in shareholders? accounts.) Other tax exempt
shareholders can also receive refunds of the taxes paid on their
behalf on the deemed dividend by filing IRS Form 990T.


Shareholders requiring further information about the impact of the
deemed dividend on their state and/or local taxes should consult their
tax advisors.


For more complete information about the Company's tax status and the
implications for the Company's shareholders, please see the Company's
2004 Annual Report on Form 10-K.


Harris & Harris Group is a publicly traded venture capital company
that makes initial investments exclusively in tiny technology,
including nanotechnology, microsystems and microelectromechanical
systems (MEMS). The Company's last 25 initial private equity
investments have been in tiny technology-enabled companies. Since
2001, Harris & Harris Group has invested a total of approximately
$41,270,912 in tiny technology-enabled companies, of which it has
invested approximately $15,887,078 in 2005 to date. The Company has
20,756,345 common shares outstanding.


Detailed information about Harris & Harris Group, Inc. and its
holdings can be found on its website at http://www.TinyTechVC.com.







This press release may contain statements of a forward-looking nature
relating to future events. These forward-looking statements are
subject to the inherent uncertainties in predicting future results and
conditions. These statements reflect the Company's current beliefs,
and a number of important factors could cause actual results to differ
materially from those expressed in this press release. Please see the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for a more detailed discussion of the risks and
uncertainties associated with the Company's business, including but
not limited to the risks and uncertainties associated with venture
capital investing and other significant factors that could affect the
Company's actual results. Except as otherwise required by Federal
securities laws, Harris & Harris Group, Inc., undertakes no obligation
to update or revise these forward-looking statements to reflect new
events or uncertainties. The reference to the website
www.TinyTechVC.com has been provided as a convenience, and the
information contained on such website is not incorporated by reference
into this press release.





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