Between January and March 2021, Family Enterprise USA (FEUSA) conducted its annual survey of family businesses in the United States (the FEUSA survey). FEUSA was also part of a nationwide survey in August 2021 of 1,000 demographically diverse voters in the United States (the voter survey), who responded to questions regarding how they feel about different types of taxation.
Taken together, the surveys provide key takeaways for family businesses—organizations that are always concerned about the economy and legislation and how they both impact their businesses. Below, we provide you with some important results from both surveys.
Family businesses distinguish themselves from non-family businesses in that 76% of them have been operating for more than 30 years, and 17% of them have been operating for over 100 years. More than half (52.4%) pay salaries and benefits above their non-family business competition. In terms of charitable giving, family businesses “give locally”—71% contribute to local charities over national charities (21%), strengthening their impact and making their mark in their own communities.
Unsurprisingly, the FEUSA survey revealed that 58.4% of family businesses saw a decline in revenue in 2020, yet 41.6% saw an increase. Industry conditions, economic conditions and the coronavirus were the top three factors affecting the change in revenue. On a positive note, 85.1% expect their revenue to grow in 2021, with economic conditions playing the major role in growth.
Family Business Tax Concerns
Family businesses rank income tax, estate tax and capital gains as their top three tax concerns, in that order. Their choice for reform of the estate tax is to make the current level of lifetime exemption permanent and not expire at the end of 2025. Their next choice for reform is to reduce the rate of the estate tax from 40% to that of a capital gains tax rate. Repealing the estate tax comes in as their third choice for estate tax reform.
Voter Tax Concerns
With proposals emerging from President Biden and his administration that would raise the estate and capital gains taxes on U.S. family businesses, it was important to get a sample of where voters stood on these issues, vis-à-vis family businesses. Some results in the voter survey were surprisingly unified by respondents on both sides of the political spectrum.
Policy and Taxation Group is your voice in Washington on economic freedom. We advocate for policies that allow American families to fully enjoy the economic liberties and benefits of a robust free market unique to our nation. For over 25 years, we have been the loudest voice in the nation’s capital on eliminating the death tax. This ill-conceived tax has a destructive impact on families, family businesses, job creation, and the national economy.
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