America is positioning itself for success in the future. The recent tax reform legislation has produced immediate positive results, most notably in generating big bonuses while also alleviating burdensome taxes. We can be optimistic about the future. As our President recently noted, America is open for business, and grateful of these new policies, American businesses are giving back. This news is especially true for American Family Businesses, and ipso facto, is greatly impactful for our nation. According to the Conway Center for Family Business (CCFB), “Family businesses account for 64 percent of U.S. gross domestic product, generate 62 percent of the country’s employment, and account for 78 percent of all new job creation.”
The Tax Cuts and Jobs Act has protected jobs and infused capital into our economy. Equally important, it has created greater protection against morally unjust taxes like the death tax, providing needed, albeit temporary relief. It is imperative that we capitalize on this momentum, and Congress should act by locking the individual cuts they have made permanently. Doing so provides needed predictability and stability. It also helps offset a major period of transition that we are seeing with our family businesses today, as older generations give way to the younger ones.
The CCFB estimated that in the last year, “40.3 percent of family business owners were expected to retire.” Given the new increased exemptions in the death tax, two thirds of those companies and their employees have been protected. This is immensely important given their impact on our economy. However, many of these cuts will resurface without further action from our leaders. The death tax in particular will return to its 2017 level and perhaps worse, in 2025. In fact, Democrats are on record as desiring a 65 percent rate, a crippling prospect to a community responsible for so many critical jobs. The time is now to protect our family businesses forever, so we don’t make that major mistake.
In addition, clarity is needed. Ephemeral tax cuts make it incredibly difficult for family business owners to predict what may transpire, as well as utilize additional funds for long term job growth. Ultimately despite positive progress, we are stunting greater advancements and minimizing impact.
Here’s what we know today: Tax reform is working in getting money back to small businesses and their employees. The President in his State of the Union noted that “since we passed tax cuts, roughly 3 million workers have already gotten tax cut bonuses — many of them thousands and thousands of dollars per worker.” Even the biggest companies, Walmart, Boeing, Lowe’s, Apple, JP Morgan Chase, AT&T, Comcast, Home Depot, Jet Blue, and Starbucks are giving back. As these companies continue to set the tone, progress will be made.
It is safe to have a positive outlook going forward, but, more should be done. This tax plan will enhance economic growth and reduce spending. It is fiscally smart policy, working to remove burdensome restrictions and raise wages, while also protecting family businesses nationwide. Congress should do what it takes to make these advances permanent.
Palmer Schoening is Chairman of the Family Business Coalition, a diverse collection of organizations and industry groups united for the common purpose of protecting America’s family businesses across the country.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.