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Congressional Family Business Caucus Roundtable Summary – May 14, 2024 - Pat Soldano

Pat Soldano opened the roundtable by thanking Members of Congress and family-owned businesses for joining the second Family Enterprise USA (FEUSA) event of 2024 in coordination with the Congressional Family Business Caucus. Pat highlighted the role of FEUSA in advocating for small, medium, and large family-owned businesses of all industries and their lifetime of savings.

 

Pat highlighted that the event featured a panel of both family business owners and family business centers and noted that 87 percent of businesses in the United States are family-owned businesses and family businesses account for 59 percent of the private workforce and 54 percent of private sector GDP.

 

Pat Soldano then introduced the family-owned business and family business center representatives participating in the roundtable discussion and asked them to discuss how succession planning has impacted their business. Marc Goodhart (President of Goodhart Sons, Inc.) first discussed his fourth-generation custom manufacturing business. Marc highlighted that the average tenure of his employees is approximately 16 years and noted that his business employs several non-owner parents and children as employees. Marc also highlighted the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) and research and development (R&D) expensing and stressed the negative impact of higher taxes on the ability to hire more employees and invest in businesses.

Kevin Tsao (Chief Strategy Officer of ENO Brands) discussed his personal experience with succession at his family’s second-generation luxury goods and jewelry manufacturing business, noting that he did not intend to join the family business. Kevin stressed the importance of NextGen family business ownership because of the impact of family-owned businesses to their communities and above average benefits provide to family business employees. Dave Henderson (Former President and CEO of Cilker Henderson Properties) then noted the importance of family business owners developing a plan to transition their business to the next generation of ownership, including communicating succession plans to children. He shared his personal experience of transitioning management of his family business to his son and also highlighted the negative impact of uncertainty in government policies on succession and taxes and their impacts on family-owned businesses.

We then heard from Danielle Koehler (Chairwoman of The Vollrath Company) who provided an overview of her family’s sixth generation stainless steel and aluminum manufacturing business which employs over 1,300 employees worldwide. Danielle discussed her family’s experience with succession, including her grandfather’s decision to place his shares in the family business into a generation skipping trust (GST) and noted challenges in planning for future estate tax liabilities. She also discussed the importance of Section 199A in providing opportunities for businesses to reinvest in their employees and operations.

Next, Jon Kemig (Executive Director of the University of St. Thomas Family Business Center) provided remarks on behalf of the family business centers in attendance. Jon discussed the role of family business centers in providing family business education, including on ownership rights and succession planning. He also highlighted recent events held for Women- and Black-owned businesses, which included discussions on access to capital and other issues facing family-owned businesses. Mark Nicholson (Former Co-Owner of Red Jacket Orchards) then discussed his third-generation agriculture and beverage company. He noted the need to build upon past generations’ success in capital-intensive businesses like agriculture. Mark stressed the importance of planning for unexpected situations and relying on expert resources for succession planning.

We then heard from Steve Wells (Co-Founder of American Food & Vending) who highlighted his family’s experience in planning for the succession of their food and dining services company. He stressed the importance of perpetuating family-owned businesses but noted that many family-owned businesses fail to continue between generations, including due to a lack of education and barriers to succession, such as the estate tax. He also highlighted how planning for succession and navigating government policies can detract from reinvestment in businesses and employees. He finally asked Congress to take a more active role in encouraging successful family business succession and noted that policies that increase barriers to succession can lead to family disruption, loss of tax revenue and wealth generation, and loss of support to local charities and philanthropic efforts.

Next, Rep. Randy Feenstra (R-IA) discussed the estate tax and the current estate tax exemption amount established by the 2017 Tax Cuts and Jobs Act. Rep. Feenstra noted that the increased exemption level is scheduled to sunset at the end of 2025 and stressed the importance of extending the increased estate tax exemption past 2025. He also highlighted his legislation, the Death Tax Repeal Act (H.R. 7035 ), which would repeal the estate tax and noted the legislation currently has the support of 168 Members of Congress. Finally, Rep. Feenstra announced that he would join the Congressional Family Business Caucus.

We then heard from Dan Van Der Vliet (Executive Director of the Smith Family Business Initiative at Cornell University) who presented the results of a survey of family business and entrepreneurship students. He noted that over half of students surveyed are part of families with a family-owned or operated business and a majority of those students expect to rejoin their family business or start their own business in the future. He also highlighted that students represent numerous industries, reflecting the diversity of family-owned businesses. He finally discussed common concerns reported from family business students, including communication with family members and succession planning.

Rep. Brad Schneider (D-IL) then discussed his experience as a family business consultant and with succession planning issues. He noted difficulties in transitioning business ownership between generations but acknowledged that businesses that successful transition to the next generation are more likely to have longer-tenured employees. Rep. Schneider stressed that successful family-owned businesses are an integral part of their local communities. Schneider also discussed the importance of communicating the importance of pro-succession policies to Members of Congress.

We then heard from Rep. Lloyd Smucker (R-PA) who highlighted his experience owning a family business. Smucker noted the impact of family-owned businesses in their local communities, including the impact on local employment, but also acknowledged the difficulty of transitioning businesses to future generation. He noted his role on the House Ways and Means Committee and the upcoming expiration of key provisions in the 2017 Tax Cuts and Jobs Act. Smucker finally acknowledged the importance of family business centers in providing a voice for family-owned businesses and providing for successful succession planning.

Finally, Pat Soldano presented the Family Enterprise USA video “Unsung Heroes: Workforce Challenges of Family Businesses,” which focuses on multi-generational family business employees and investment in employees. Family business representatives shared several workforce challenges including access to skilled labor and immigration policy.

The workforce roundtable was then followed by a reception which featured attendance by Members of Congress and congressional staff.

We hope you’ve enjoyed this article. While you’re here, we have a small favor to ask…

As we prepare for what promises to be a pivotal year for America, we’re asking you to consider becoming a member.

The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That’s why Family Enterprise USA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates , possible elimination of valuation discounts, increase in capital gains tax , enactment of a wealth tax , and the continued burden of the gift tax , estate tax and generation skipping tax .


Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC.  Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.


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The post Congressional Family Business Caucus Roundtable Summary – May 14, 2024 appeared first on Family Enterprise USA .

Family Enterprise USA is the organization that represents all family businesses on a national level in DC; it is not unique to any industry. Family Enterprise USA is different from other organizations because it represents and advocates for the families of family businesses and the issues, they face running their businesses every day. Our sole mission and purpose is to promote family businesses and their job growth in America. We also support the work of Family Business Centers across the country. We hope your family will choose to be a member of Family Enterprise USA.