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Wins Create More Wins, Let’s Keep the Momentum Strong for Family Businesses In 2024


By Pat Soldano 

Momentum created by success has a way of creating more success. 

It’s a hypothesis as old as Aristotle and its goes something like this: small, random wins lead to larger wins which eventually lead to ever greater wins.

Talent, persistence, hard work, and luck are important factors, but there’s nothing like a series of small wins to build a foundation of long-term success. Multi-generational family businesses know this well, and so do we at Family Enterprise USA and The Policy and Taxation Group.

The end of the year is always a good time to reflect, and sometimes the big and little wins are worthy of celebration.

The last 12 months have propelled us to a new level, one we’ve talked about for years, but never achieved until this year. The biggest win: The Congressional Family Business Caucus. After so many years of battling, family businesses have an official voice in our Nation’s capital. 

It’s hard to overstate the importance of this win. Family Enterprise USA and The Policy and Taxation Group were instrumental in the support and creation of this bipartisan Caucus, and in 2023 we hosted each of the first three Capitol Hill meetings.

If you are a regular supporter you know the Caucus is co-led by Reps. Jodey Arrington (TX-19), Brad Schneider (IL-10), Henry Cuellar (TX-28) and Claudia Tenney (NY-22). To date, the Caucus has 31 members of Congress signed on to its mission. The mission is simple: to educate our leaders on Capitol Hill on the power and size of America’s family businesses. Family business comprise nearly 60% of the U.S. workforce and are a $7.7 trillion contributor to U.S. GDP.  

Legislative Wins

The combined legislative years of year 2022-23 will go down as one of the strongest periods of legislative wins helping family businesses. The last 18 months have seen significant progress in passing, or stopping, federal legislation considered significant for family enterprises large and small, including the re-shaping of tax provisions proposed early in the Build Better Back Act and Inflation Reduction Act.

The wins include stopping income tax increases for family businesses and successful individuals, planned increases in the estate tax rate and reduction in lifetime exemption, and the potential elimination of valuation of discounts for estate tax purposes.

These intricate policies are among just a few of the actions Family Enterprise USA and The Policy and Taxation Group worked hard to educate Congress on over the course of the last year.

Other policy wins we were removing from the “policy table” a new 5% surtax on income of $10 million or more and $200,000 for trusts and estates, a net investment income tax of 3.8% on non-passive income, and the elimination of accelerated depreciation and like in kind exchanges.

Communication Wins

Part of our job is to communicate our messages effectively and we saw several wins in that column too. 

In the last year, we created this monthly column for our supporters and influencers, we have teamed with Family Business Magazine to create an every-issue column called “From the Hill,” where we feature the latest family business news and issues from Capitol Hill, and we produced 13 new podcasts, “The Voice of Family Business from Capitol.”  In the podcast, airing on Spotify, we interview key experts, influencers, and family business executives on the latest trends and issues of the day. If you don’t know about the podcast, check it out on Spotify, and other podcast platforms.

In addition, we send our weekly email updates to over 45,000 readers and in the last 12 months we’ve presented our story at over 70 meetings. We have keynoted at multiple conferences, produced monthly family business webcasts and videos, held hundreds of Capitol Hill meetings with legislators and staff, and as mentioned, organized three high-level Caucus meetings with our Co-Chairs, other congressional leaders, and executives from top family businesses. 

We have our experts, too, like the law firms of Brownstein and Patton Squire Boggs, and our messaging expert Dr. Frank Luntz, providing weekly insights into the issues facing family businesses, as well as private dinners and meetings on the latest Washington, DC insights,

Our websites (www.familyenterpriseusa.com and www.policyandtaxationgroup.com) have become go-to informational resources. Our members, supporters, and donors go to our websites to find anything having to do with the challenges facing family businesses, family offices and their clients, and successful individuals.

We consider these communications and messaging actions big wins for family businesses and are part of our foundation for future success. But if wins lead to more wins, then is the opposite true: does a loss lead to more losses?

Holding the Line on Estate Tax

The estate tax lifetime exemption has never been as good as it is in 2023. But it all changes January 1, 2026. Unless new legislation is passed by January 1, 2026, the most favorable estate tax exemptions in 50 years will end, and exemptions will be cut in half. Will this lead to more losses?

We’re talking about significant losses for family businesses that have worked hard to save money and build their businesses. We need to hold on to this win!

The 2017 Tax Cuts and Jobs Act nearly doubled the lifetime estate and gift tax exemption from $5.6 million for individuals and $11.18 million for couples, to $11.18 million for individuals and $22.36 million for couples, indexed for inflation after 2018. 

For 2023, the exemption still stands at $12.92 million per person and $25.84 million for a married couple. You can give up to those amounts over your lifetime without paying federal gift tax. Any amount above is taxed at a hefty 40%.

But in 2026, it will get ugly, if things don’t change. That is when the gift and estate tax rate revert to pre-2018 levels, which means exemptions will be axed in half.

If you want to maximize your family estate and minimize the cost of the Internal Revenue Service tax bill, the time is now to start planning, or face gift or estate tax liability in 2026 you won’t like.  It is also time to fight to keep this win in the plus column.

Family Office Wins

Family offices saw wins too. This year was a year of adapting to the needs of the Next Generation.

A new voice for the family office industry, Family Office Pro Newsletter, or FO Pro, was started by MLR media, the publishers of Family Business Magazine.  It means the family office business has matured to the point where it deserves some specific media attention. Another small win.

The global family office market size was valued at $13.7 billion last year, and it’s expected to reach $21 billion by 2028, according to research by Campden Wealth. The average family office has six people running it, manages $365 million in assets, and costs families about 1% of that total, according to research from the Family Office Exchange (FOX).

There’s a long list of challenges for family offices and their clients: Next Generation quirks, persistent inflation, private equity investment risk, hybrid workplaces, ESG investing, crypto currency, more government regulation, cheaper operating costs, technology, AI, and generally just more and cheaper alternative options.

When it comes to government oversight, family offices are subject to light regulatory oversight due to the focus on personal wealth, versus investor wealth. That could change fast. 

U.S. lawmakers are considering legislation around how assets and investments are being taxed and to what degree large family office investments threaten the economy and the financial system. This is where reaching out to congressional leaders and the members of the new Congressional Family Business Caucus is so vitally important.
We will have to wait and see where the wins materialize in those battles.

Compromise Wins

The chaos in Congress is too hard to predict right now. But one thing is certain against the blur of talking heads: compromise is the future.

It may seem impossible, but small wins of compromise seem to energize both sides of the aisle. We need more of these small victories to help infuse confidence in our system, economy, and into the customers of our family businesses.

When it comes to personal income tax policy, estate tax policy, issues like valuation discounts, and grantor trusts, the spotlight is on the Republican-controlled House Ways and Means Committee. Frankly we are still waiting for some wins there. Let’s hope.

There is no doubt danger lurks. 

With a new Speaker of the House finding his footing and endless debt ceiling, war spending, and offset negotiations part of the daily news cycle it’s hard to find wins anywhere in Congress. But we can fight for what we don’t want. We don’t want taxes to go up. Let’s not forget the $14 billion set aside for IRS investigations into successful individuals, too.

Fighting Increased Taxes

No one knows where this will end up, but we do know the debt ceiling will go up, and up. It’s likely spending cuts will be part of some deal and some point, and to insiders, Republicans and Democrats have not ruled out revenue increases, which means higher taxes somewhere along the line. 

Recently, the Democrat-controlled Senate sent a letter to Treasury. The letter urged it to exercise its authority limiting abuse of trusts by the ultra-wealthy. It was a clear warning.

The first demand is to revoke guidance on the transfer of assets between a grantor and a grantor trust as a non-taxable event. The second, revoke guidance holding that gift taxes do not apply to a grantor’s payment of income tax attributable to trust income. The third, reissue regulations to address abuse of valuation discounts. And lastly, require GRATs (Grantor Retained Annuity Trust) to have a minimum remainder value. Talk of the old top capital gains rate of 39.6% is still on the table, as are transfers of property by gift or on death considered realization events. 

Then, there is the imposition of a 20% minimum tax on total income, including unrealized gains, for taxpayers with $100 million to report annually. There is much more too, like no step up in basis, changes to gift taxation, and a list of others to long to catalog here. 

The question is: what can we do to fight against these likely tax increases, all of which will hurt family businesses, our local communities, and the economy? We’ve been winning these battles over the past two years, but we must continue to the fight, and win again.

As the 2023 closes and 2024 opens with its full-bore election circus we need to savor our wins, if briefly, and then identify our next battles. 

We need to muster the strength and will to communicate fully the high stakes facing family businesses. 

If we are successful, these small wins will add up to something big in the year ahead.

Pat Soldano, President of Family Enterprise USA, and the Policy Taxation Group, both are non-partisan organizations advocating for family enterprises of all sizes and are the organizers of the Family Enterprise USA Annual Family Business Survey 2023.

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The need for fact-based reporting of issues important to family offices and successful individuals and protecting a lifetime of savings has never been greater. Now more than ever, family offices and successful individuals are under fire. That’s why Policy and Taxation Group is passionately working to increase the awareness of issues important to family offices and successful individuals, while continuing to strengthen our presence on Capitol Hill.

Policy and Taxation Group is the Voice for Family Offices and Successful Individuals in Washington, DC focused exclusively on the critical tax and economic policies that impact them.

Since 1995, Policy and Taxation Group has been the leading advocacy group working to reduce and eliminate estate tax, gift tax, and generation skipping transfer tax while blocking increased income tax and capital gains taxes, the creation of a wealth tax, and other hostile tax policies that punish hardworking taxpayers and success.

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