Coming on the heels of Thanksgiving and “Black Friday,” Small Business Saturday is a perfect opportunity for Americans to pause and contemplate the critical role small businesses play in our nation’s economy. Many small businesses are family owned and are responsible for 62 percent of the country’s employment and $5.9 trillion of the nation’s GDP. Often with deep roots, these family-owned businesses play critical roles in the philanthropic and economic heart of local communities.
The manufacturing sector has a long history of strong, family-owned businesses. They are not only mainstays of communities across the country, but are also key to our nation’s supply chain, providing well-paying jobs to millions of workers. For this reason, the National Association of Manufacturers (NAM) has long supported the goal of repealing the “death” (or estate) tax on family-owned businesses.
The NAM has led the business community in pushing back against a proposed rule from the Treasury Department released in August that would reduce the ability of families to pass their company on to the next generation. In particular, manufacturers are concerned that the proposed regulations would severely restrict the availability of well-established minority valuation discounts in intra-family transfers of family-owned enterprises.
Manufacturers believe the proposed regulations, which incorporate some of the most sweeping changes to estate tax policies in the past 25 years, would unnecessarily increase estate and gift taxes on family-owned manufacturing companies by an estimated 30 percent or more, severely impacting the ability of owners of these family businesses to transfer their companies to the next generations.
Even with the tradition and success of family-owned businesses in our country, the long-term viability of active family-owned enterprises declines with each successive generation. According to a recent study by the Conway Center for Family Business, “one-third of family-owned businesses survive into the second generation, and of those, 12 percent are viable into the third generation, with only 3 percent of all family businesses operating at the fourth generation and beyond.” Unfortunately, for manufacturing firms, the proposed regulations have the potential to make succession planning for the next generation significantly more costly and difficult.
The NAM has long led the business community to fight for policies that help foster small businesses that are the lifeblood of our economy. On this “Small Business Saturday,” join the NAM in fighting back against these proposed regulations that would harm family-owned businesses. Sign on to our petition to the Obama administration and ask it to withdraw these harmful regulations and join with us as we work with the incoming Congress and administration to pursue policies that will help grow this critical part of our nation’s economy.
Latest posts by Carolyn Lee (see all)
- IRS Hearing Day on Family-Owned Business Estate Tax Regs - December 1, 2016
- #SmallBizSaturday: Help Family-Owned Manufacturers Succeed - November 26, 2016
- NAM Calls for Withdrawal of Treasury’s Family-Owned Business Proposed Regs - November 2, 2016