As a family owned business for 97 years now, White Castle has learned a lot about what it takes to create an enterprise that’s sustainable and capable of nourishing our team members, and the communities where we live, work and raise our families.
Along the way, not only do we get to serve up the one of a kind steam-grilled taste we’re famous for, we get to nourish the souls of craver generations everywhere, create memorable moments every day – and have a lot of fun!
From humble beginnings in 1921, White Castle today has nearly 400 company owned restaurants, a thriving packaged goods division and 10,500 team members who make our work their life’s work. In fact, more than 1 in 4 of our team members has been with White Castle 10 years or more, and of our top 450 leaders in restaurant operations, 442 started behind the counter in an hourly job! Our team member engagement scores are industry leading, and 22 points above the “norm”. Among our “famous firsts”, we have offered health insurance to team members since 1924, retirement benefits, profit sharing and an annual holiday bonus to all team members since 1928, and we were the first hamburger chain to sell 1 billion burgers. No wonder Time Magazine has named White Castle ‘the most influential burger ever’.
Yet, 51 years ago, it almost ended prematurely when our founder, Billy Ingram passed away. The oppressive estate tax White Castle faced didn’t just cripple the business, it almost forced us to sell everything to cover the liability. We managed through it, with growth curtailed and assets converted to cash to cover the costs. And as we were treading water to survive, we saw up and coming ‘new’ competitors like McDonald’s, Burger King and Wendy’s stake out a national presence while we struggled to maintain the gains we had made in the 1940’s and 1950’s. Needless to say, it left a bad taste in our mouth.
We stand at a critical moment in the history of family business in the United States. We have an opportunity to once and for all make thoughtful decisions that will benefit communities and the economy for generations to come. Repealing the death tax will unleash economic growth and prosperity for all citizens everywhere. Here are three reasons why.
- Serving Stakeholders vs. Shareholders – The family business model is unique because it doesn’t focus singularly on ‘increasing shareholder value’ like many publicly traded entities do. Family businesses ‘maximize stakeholder value’ because the audience isn’t just investors, it’s also employees and their families, the neighborhoods where we operate and future generations of leadership and ownership. The death tax attacks this notion because it artificially directs resources away from investing in the business to estate tax planning – all just to ensure that when an owner dies, the business isn’t threatened by the tax event that occurs. Death should not be a taxable event. Especially when the dollars taxed have already been taxed two or three times!
- The Death Tax hurts everyone – not just the families who pay it – An often cited argument says current death tax exemption levels mean only the “super-rich” pay the tax, so it should be maintained at current levels. Here’s a fact that’s often too easily overlooked. The death tax is on the value of ‘assets’ a person has at the time of their death. A business like White Castle has built a significant balance sheet over 97 years. The assets on that balance sheet are properties where we have restaurants, plants and bakeries where we produce the food we serve and other tangible real goods that aren’t easily converted to cash. It’s not as if upon the death of a family member, we’re able to wave a magic wand, and convert those hard assets to bitcoin or currency to send to the IRS. Family businesses everywhere encounter the same dilemma. Often, sadly, this leads to the sale of a business, which means the distinctive qualities of being family owned are gone – and hardworking Americans, neighborhoods and charities suffer as a result. All because a confiscatory tax punishes success and those who do the most to keep the economy strong.
- Courage to Act and Leave the Labels Behind – So many issues these days get caught in a senseless game of who can shout loudest and American citizens suffer because of this oversimplification and lack of thoughtful dialogue. Now is the time to act courageously to recognize, as a matter of principle, Washington should never penalize a lifetime of hard work and savings the moment you die. The death tax represents double and triple taxation – at the wrong time and for the wrong reason. Only in Washington could the career politicians and unelected, unaccountable bureaucrats at the IRS think this makes sense for hardworking Americans. It’s as simple as that.
At White Castle, we have a simple and straightforward focus – remaining a family owned business for generations to come. We believe it is what we are able to do best- because when we ‘feed the souls’ of our team members and communities, it goes beyond mere physical food – it is nourishment that makes our neighborhoods better and more prosperous. Our biggest threat to making this dream a reality isn’t internal – its bad policies like the death tax – which threatens us most. Today, we have a real chance to embrace common sense and act in a way that benefits future generations as far as the eye can see. Let’s not squander it.