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Congressional Family Business Caucus Starts With Topics of ‘Succession’ and ‘Workforce,’ as 2024 Focuses on Leadership Issues Affecting Family Businesses

 

The second bipartisan Congressional Family Business Caucus meeting of 2024 will focus on how to best manage leadership succession issues facing America’s family businesses.

 

This comes after the last Caucus meeting focused on “Workforce” issues. The entire 2024 thrust for this year’s Congressional Family Business Caucus will be on topics that most affect the future of family businesses.

The Congressional Family Business Caucus meeting held May 14 in the Longworth House Office Building is expected to bring together Caucus Congressional members from both parties, including co-chairs Brad Schneider (D-IL), Claudia Tenney (R-NY), and Rep. Jodey Arrington (R-TX), and Rep. Henry Cuellar (D-TX).

To date, the Caucus has 41 House members and carries the mission of educating Congress and raising awareness for America’s family businesses, the largest private employer in the country. Family businesses account for 83.3 million jobs and contribute $7.7 trillion annually to U.S. gross domestic product, according to research.

During these Caucus meetings I present findings from our 2024 Family Enterprise USA Annual Family Business Survey, which highlights how family businesses look at succession and how prepared they are for handing over the reins to future business leaders. In addition, we created ten family business leaders talking about their concerns about succession, from estate taxes to selling the business outright, also shown during the meeting.

At this year’s first Caucus meeting, when “Workforce” was the topic, we revealed early findings from the annual survey. The survey, among 800 family executives from across the country, found when it came to top issues, the “Top 3” workforce challenges this year, were: 1) Recruiting & Training (54%); 2) Benefits/Pay (25%); and 3) Culture Building (14%).

Other highlights from the research found the top three tax policies “of top concern” to family businesses were ranked as follows, by percentage of respondents: 1) Income taxes (41%); 2) Estate taxes (19%); and 3) Payroll taxes (13%).

When it came to the top economic policy priorities family businesses are at number one, the survey found “Reduce the Federal Budget/Debt,” at 30%, and at number two, “Reduce Income Taxes,” at 23%.

Simply, family business is big business, but Congress doesn’t see the size. The Caucus is designed to help educate Congress on the role and power of family businesses in this country. These topics and our survey findings are important for our legislators to see and to understand so they can make policy decisions that help, not hurt, family businesses.

In the first Caucus meeting of the year, it was presented that the top three workforce challenges this year, are: 1) Recruiting & Training (54%); 2) Benefits/Pay (25%); and 3) Culture Building (14%).

House Members Speak on Family Business

House members in attendance at the March meeting listened to the survey results and then spoke on the importance of family businesses to the economy and they listened to six family-owned businesses executives, all non-family employees, tell their stories.

For example, Rep. Schneider started the meeting by discussing his family’s experience operating a family-owned business and his past consulting work. Schneider stressed that “family-owned businesses are the fabric of local communities.”

Rep. Duarte spoke of his background as a fourth-generation family farmer and business owner in California, and his experiences with family-business issues, including tax challenges and the impact of inflation.

“I understand the impact of policy decisions on family-owned businesses, including reduced access to capital,” he said.

Duarte, on the House Ways and Means Committee, said he “will adopt pro-family-business policies in future legislation, such as farm savings accounts.” He added that, “family ownership is more durable over time.”

Rep. Tenney highlighted her Upstate New York family-owned newspaper business and how her role on the House Ways and Means Committee may be helpful. She noted the challenges of operating a family-owned business, including high healthcare costs, access to labor, and competitive benefits, but expressed optimism that family businesses “will flourish in the future.”

Rep. Molinaro, highlighting his role on the House Small Business Committee, said over 70% of “new jobs are created by small and medium businesses.” He added he was disappointed seeing many family-owned businesses leaving communities in his Upstate New York district but was “also optimistic about future entrepreneurship in the area.”
At the meeting, Rep. Miller discussed her family’s multi-generational car dealership business, saying “most members of Congress are unfamiliar with the everyday challenges of owning and running a business.”

At a reception following the Caucus co-chair Rep. Arrington offered his remarks to the group, with a focus on how to manage in an era of political polarization.

Real-World Family Business Stories

The non-family employees who told their real-world family business stories were from Golden Star Technologies, Trophy Automotive Dealer Group, Global A1st Flagship, Laticrete International, Bush Bros. and Co., and GSM Industrial.

One such story came from non-family member Chris Paz, President at family-owned and Los Angeles-based Trophy Automotive Dealer Group LLC, representing such brands as Mercedes, Kia, and Nissan.

“Every day I see the truly unfair tax burdens and non-market-driven regulations, such as expensive electric vehicle requirements, that are driving small auto dealerships out of business,” Paz said.

Henry Ngo, Senior Vice President at Golden Star Technology in Cerritos, Calif., discussed the severe lack of talented professionals.

“The labor laws and immigration policies have a huge impact on our business,” Ngo told the Caucus attendees. “As a business founded by immigrants from Taiwan, there is a critical shortage of skilled professionals in the technology industry,” he said. “We used to rely on trade and vocational schools, but these are gone. We’ve had to learn how to do more with less.”

Lawmakers at the Caucus also heard how well-intended government policies can go awry.

“Our biggest concern is dealing with policies that end up with unintended outcomes,” said Ron Nash, President, COO, Laticrete International, based in Bethany, Conn. Nash is a non-family executive at Laticrete, an international tile installation systems company. The stark reality, according to Nash, is “America needs to start inventing again.”

In addition, he said, research and development tax policies “need to be revised so companies can start investing in America, we no longer are a country of doers and makers, we need to get back to that, back to investing in America.”

Another non-family employee, Nichole DeGidio, Vice President of Human Resources at Global A1 Flagship, a Defense Department contractor based in Orange County, Calif., explained how investing for the long-term creates stability and confidence.

“Working for a family business, I see the real commitment from owners to employees,” said DeGidio. She has worked for Global A1 Flagship for 16 years.

“In family businesses we see how the decisions are made for long-term sustainability and not for short-term profits, and opinions matter in our company. When we have stability, it creates confidence, and that’s why we have so many multi-generational, long-term employees,” she said.

The Tennessee-based bean company, Bush Bros. and Company, had its Director of External Affairs, Robert Loggins, a non-family member executive, focus his remarks on attracting Gen Z and Millennials to the workforce.

“We’re a rigorous employer in a small town and its tough attracting young people, but we feel this as more of an opportunity than an obstacle once they come and take a look,” said Loggins to attendees. “To keep them interested, we focus on being a great place to work and grow a career over time—and we offer great incentives including distributions of over five hundred million dollars to employees over the last twenty-five years.”

Brian Dombach, President of GSM Industrial and a non-family member at the 200-employee industrial services company, echoed the industry wide issue of finding skilled workers.

Our number one workforce issue is finding welders, technicians, hourly workers, ductwork workers,” Dombach said. “We just can’t find them, it’s something that needs to be addressed across all industries.”

Listening and learning from executives dealing with these issues everyday, and seeing the most recent research on the challenges, is exactly what our Congressional leaders need to understand so they can make policies that help, and not hurt the number one private employer in the United States, family businesses.

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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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