Family Business, ‘The Quiet Giant,’ Gets Leadership Voice on Capitol Hill with New Congressional Caucus
You might call family businesses in America the “Quiet Giant.”
“Quiet” because up until recently, the family business sector did not have a dedicated seat at the table in Congress.
“Giant” because America’s family-owned businesses are the foundation of the US economy, contributing nearly 60% of the country’s private employment, accounting for 78% of new job creation, and representing $7.7 trillion per year to GDP.
In December 2022, family business finally gained a leadership voice in Congress with the establishment of the bipartisan Congressional Family Business Caucus, the first congressional caucus focused solely on the critical issues facing generational owned family businesses of all sizes and industries across the United States.
The caucus is co-led by Reps. Jodey Arrington (TX-19), Brad Schneider (IL-10), and Claudia Tenney (NY-22). Rep. Tenney, a longtime small business owner with a family printing and manufacturing company in upstate New York, comes to the table with a full understanding of the power of family business. And, as caucus co-lead, she wants to deliver “real policy results.” Another co-lead, a Democratic, will be announced shortly, and will round out the bipartisan group.
What Will the Caucus Do?
The Family Business Caucus has mapped out education as their primary purpose. Simply, they first want members of Congress to know the massive contributions family businesses make in the country. Additionally, the Caucus will convene regularly and will connect members of Congress with family businesses from across the country.
The good news is the Family Business Caucus is open to all members of Congress with an interest in learning more about and supporting family-owned businesses. This will happen at Caucus events and with “fly-ins,” where members of Congress meet directly with family businesses in their district/home state. These events will hold discussions with House and Senate leadership on critical issues impacting family businesses, as well as discussions on leadership in philanthropy, community service, social justice, and other good will efforts initiated by multi-generational family businesses.
Risks and Policy
Every year, Family Enterprise USA publishes a national survey on the top concerns of family businesses in America. Last year, the biggest worry to surface was high income taxes, with 47% saying they were out of control. This year, the study is underway, and taxes will likely again be high on the list of concerns, but the cloud of inflation will certainly also be a big issue. But the steadiest worry is that of continued government policies that disadvantage family businesses.
The examples are many.
Mark Peters, President and Chief Executive Officer of Butterball Farms, a multi-generationally owned business in Michigan, points to the result of the Enron bankruptcy, which heaped huge accounting compliance costs on to public companies, which then leaked onto all companies.
“Compliance accounting became, and still is, an enormous cost for us,” Peters says. “These additional government rules are like a tax on all companies. As a result, we need to make tough financial choices because of these regulations, and these choices are often not great.”
In family-owned enterprises, profit is only one motivating factor. Many family businesses are focused on their net contribution to society—on giving back. And Congress needs to learn this untold part of the story.
Peters, for example, takes advantage what he calls “patient capital” and harnessing of the power of a family-based workforce.
“One of the great things about multi-generational family businesses,” he says, “is that we can be patient with our capital; we can forgo short-term gains for better longer-term gains.”
Peters wants Congress to know businesses can use the power of collaboration to stabilize a workforce and impact local communities.
Another example is Kent Thompson, President of Thompson Realty Group based in Lincoln, Neb., a big believer in the power of giving back.
Thompson’s 33-year commercial realty company invests in the community. The Thompson family has built schools and other projects in the Caribbean, Latin America, and Africa. Thompson hopes that the government can develop policies that reward investments in humanity.
Family businesses and the organizations educating about family business concerns, like the Congressional Family Business Caucus, help tell the family business story in America, and provide non-partisan intelligence, research and information on the economic impact family businesses have on the US economy, as well as the contributions they make to their communities.
What family businesses want is simple stability and consistency—and they are hoping that this new Caucus is the beginning of a bipartisan relationship toward this goal.
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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 Policy and Taxation Group 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. Those issues include Step Up in Basis, gift tax, Valuation Discounts, Capital Gains Tax, Income Tax Rates, Wealth Tax, & Estate Tax (death tax).
Policy and Taxation Group is the leading information, education and advocacy organization working for the reduction and ultimate elimination of estate, gift, and generation skipping transfer taxes, and other taxes that punish hard work and success. Our Mission is to challenge hostile tax policies that meaningfully and measurably impact families and limit the ability of family businesses to remain family owned. We work with Congress in Washington DC against 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 Estate Tax (death tax), and the possible elimination of Step up in Basis.
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