The National Association of Manufacturers (NAM) applauds the leadership of Rep. Warren Davidson (R-OH) and Sen. Marco Rubio (R-FL) in introducing legislation to prevent the finalization of proposed regulations affecting the transfer of minority interests in a family-owned business. Since these proposed regulations were released in August, there has been a growing concern among small manufacturers about the potential harmful impact of these proposals on the continuity and succession planning of family-owned enterprises. Thousands of manufacturers across the United States are family-owned businesses. These businesses, often in their second and third generation, are at the heart of the manufacturing supply chain and are a critical piece of the economy.”
The proposed regulations purport to address what Treasury believes to be abusive tax planning. In reality however, as more than 3,800 family-owned businesses and trade associations representing these businesses expressed in an NAM-led letter sent to Treasury last week, “the proposed guidance is one of the most sweeping changes to estate tax policies in the last 25 years and would be detrimental to active enterprises and family-owned businesses that employ millions of workers throughout the nation.” While most taxpayers applaud efforts to target abuses in the tax system, if the proposed regulations are not corrected, they have the potential to threaten “the ability of families to pass businesses on to the next generation of owners.” Manufacturers applaud the leadership of these members in introducing this legislation and will continue to work to protect family-owned manufacturers so that they can continue to compete and succeed.