Coalition Outlines Tax Policies That Would Help Family-Owned Businesses

The Metals Service Center Institute (MSCI) is part of the Family Business Coalition, an organization whose mission is to protect family owned and operated businesses across the United States. Palmer Schoening, the coalition’s chair, recently testified before the U.S. Senate Committee on Small Business regarding small business succession planning and the legislative priorities that federal lawmakers could put into place to make it easier to pass family businesses on to the next generation.

Schoening’s testimony touched on two tax policies that MSCI strongly supports: keeping in place the 2017 199A tax deduction for small business income — a program that brought the income tax rate that many small businesses pay in line with the corporate income tax rate — and reducing estate and gift taxes.

Regarding estate and gift taxes, Schoening noted, “Larger family businesses that compete with publicly traded corporations may be forced to pay a 40 percent death tax at the turn of each generation, but publicly traded corporations effectively self- perpetuate without the added costs of estate taxes or succession planning.” It is for this reason and others that, this past December, MSCI joined an FBC letter asking federal lawmakers to do away with federal estate and gift taxes completely. Read that letter here.

In his testimony, Schoening also argued that federal lawmakers should refrain from enacting “temporary” tax cuts and make changes on a permanent basis instead. “Constant changes in the tax code affect planning and compliance for family business owners whose most valuable resource is their time. Being buried in paperwork prevents them from doing what they do best: creating jobs and serving the communities they are a part of,” Schoening said. Want to learn more?

Read the full testimony here.