[et_pb_section fb_built=”1″ _builder_version=”4.16″ custom_padding=”22px|||||” global_colors_info=”{}”][et_pb_row admin_label=”CTA” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” collapsed=”on” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_divider color=”#397389″ divider_weight=”2px” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][et_pb_cta title=”Make Your Voice Heard on Capitol Hill” button_url=”https:\/\/www.congressweb.com\/PTG\/12\/” url_new_window=”on” button_text=”Contact your members of Congress now and ask them to stand with family businesses by joining the Caucus.” disabled_on=”off|off|off” admin_label=”Call To Action Top” _builder_version=”4.27.6″ _module_preset=”default” header_font_size=”22px” background_color=”#397389″ custom_button=”on” button_bg_color=”#ff0019″ custom_margin=”-17px|||||” custom_padding=”16px||19px|||” global_module=”9695″ saved_tabs=”all” global_colors_info=”{}”][\/et_pb_cta][et_pb_divider color=”#397389″ divider_weight=”2px” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_5,3_5,1_5″ admin_label=”Author Byline” _builder_version=”4.24.3″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” link_option_url=”https:\/\/www.brownandstreza.com\/davidkeligian” link_option_url_new_window=”on” collapsed=”on” global_colors_info=”{}”][et_pb_column type=”1_5″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/familyenterpriseusa.com\/wp-content\/uploads\/2024\/05\/Team-members-Pat-S.jpg” title_text=”Patricia M. Soldano” _builder_version=”4.25.1″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][et_pb_column type=”3_5″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Author” _builder_version=”4.25.1″ text_font=”||||||||” text_font_size=”16px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]<\/p>\n
By Patricia M. Soldano<\/a> [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_5″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” collapsed=”off” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_video src=”https:\/\/www.youtube.com\/watch?v=IN4WzYU4Bmk” disabled_on=”on|on|on” _builder_version=”4.27.6″ _module_preset=”default” disabled=”on” global_colors_info=”{}”][\/et_pb_video][et_pb_text admin_label=”1″ _builder_version=”4.27.6″ text_font=”||||||||” text_font_size=”16px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n <\/p>\n <\/p>\n Sometimes it comes down to basic math.<\/p>\n Our government spends more than it takes in and state or federal budgets can be managed with deficits for a time. But time runs out, especially if the gap between spending and income increases decade after decade.<\/p>\n In California, for example, the population is shrinking while government spending is expanding.<\/p>\n Between 2021 and 2025, studies show real spending by the state increased from $180 billion to $240 billion annually. During this same time-period the population shrunk from 39.4 million residents to 38.7 million.<\/p>\n How does this add up? It doesn\u2019t.<\/p>\n Of course, lawmakers look for ways to backfill this gap, like taxing the income and assets of family-owned businesses through new ballot measures on so-called millionaires and billionaires.<\/p>\n On the national level, federal spending versus revenue per capita shows an even larger gap.<\/p>\n Government spending records show that in 2016 revenues brought in about $10,000 per person, while government spending was about $12,000 per person, a 20% deficit gap. A big hole, but not impossible to fill with a few tweaks in growth and a few tweaks in spending.<\/p>\n Fast forward ten years, the projected federal revenue in 2026 is expected to be about $15,200 per person, but the projected federal spending per person has jumped to $21,250, now a 40% deficit gap!<\/p>\n The federal government collects over $5 trillion in taxes annually, but it spends $7 trillion, leaving an annual debt of $1.8 trillion, and growing. Our total national debt is now over $40 trillion.<\/p>\n The math doesn\u2019t work. No amount of taxing family businesses, millionaires, or billionaires is going to fix this problem.<\/p>\n The solution is not about raising new taxes, and confiscating hardworking family assets, the real issue is wasteful government spending, corruption, and fraud.<\/p>\n In 2021 alone, government waste and fraud hit a peak of $281 billion dollars, according to the General Accounting Office.<\/p>\n Wealth taxes, or let\u2019s call them what they are, \u201csavings penalty taxes,\u201d will not fill the waste gaps in our state and federal budgets.<\/p>\n The math says we need to stop spending!<\/p>\n These savings penalty tax measures, often done with voter ballot initiatives, won\u2019t stop with the wealthy, it may start with billionaires and millionaires, but as more and more money gets spent, it will eventually trickle down and impact family-owned businesses, and then everyone.<\/p>\n And the math still won\u2019t add up.<\/p>\n Momentum is building on both sides of the Wealth Tax (\u201cSavings Penalty Tax\u201d) debate, which naturally creates a highly polarized political environment.<\/p>\n One issue that needs discussion is: How can citizens and family-owned businesses be taxed without a proper legislative back and forth? How can special interest groups push through a new tax without a legislative process?<\/p>\n In a recent Bloomberg op-ed, Robert F. Mancuso, a former SEC attorney and CEO of Capri Capital Partners, raised the issue of: \u201cDo state ballot initiatives deserve more scrutiny?\u201d <\/p>\n Typically, he points out, legislators debate, evaluate, and pass legislation, which becomes law upon a state governor\u2019s signature. This process has historically worked regardless of the subject of legislation. <\/p>\n But special interest group\u2019s look to side-step this democratic process with a ballot initiative.<\/p>\n If pro-tax coalitions collect enough signatures, they can put anything on a ballot and take it directly to voters in California. <\/p>\n No proposal has produced more controversy then the 2026 California Billionaire Tax Act supported by the healthcare-based Service Employees International Union. If voted in on November 3, it would impose a one-time 5% tax on net worth over $1 billion, excluding real estate, pensions, and retirement accounts Critics, backed by analyses from groups like the Tax Foundation, argue wealth taxes create severe valuation issues for private businesses, double-tax accumulated capital, and risk massive economic damage.<\/p>\n Mancuso argues California\u2019s ballot initiative is the equivalent of taxation without representation, because taxpayers opposed to the initiative can\u2019t petition or complain to their legislator. <\/p>\n Despite the rhetoric, Mancuso in his op-ed says, \u201csupporters of a controversial and unprecedented wealth tax in California have embraced a new technique to advance their point of view and whether permitted by a state constitution or not, such a method deserves close judicial scrutiny so that it doesn\u2019t allow the many to trample on the rights of the few.\u201d<\/p>\n Another example is Washington state, where the operating budget exploded from $102 billion to $166 billion over the last six years, far outpacing inflation and population growth combined. <\/p>\n State lawmakers enacted a 7% capital gains tax on high earners. The result: thousands left the state and took their incomes with them. Now, lawmakers are proposing a 9.9% income tax on the state\u2019s high earners. The result: family-owned businesses are saying \u201cbye-bye,\u201d and this also includes Starbucks founder Howard Schultz. <\/p>\n The same will happen to California if it adopts the billionaire \u2014 or some future millionaire \u2014 wealth tax. <\/p>\n What about the $100 billion proponents promise? Again, the math doesn\u2019t add up. <\/p>\n According to researchers at the Hoover Institution, successful families, family-owned businesses, billionaires, and millionaires are moving out and have so far removed nearly 30% of this new projected tax base, according to a report from Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.<\/p>\n De Rugy says a wealth tax is likely to produce \u201ca negative net fiscal return\u201d where the state ends up with less revenue than it had before.<\/p>\n \u201cDramatic new taxes can temporarily mask an imbalance, but they can rarely solve one,\u201d de Rugy says about her findings. \u201cMore often, higher taxes give politicians cover and enable even more spending growth. This merely delays the reckoning and makes the eventual adjustment more painful.\u201d<\/p>\n Governments don\u2019t face fiscal crises because they tax too little. It\u2019s because they spend too much. <\/p>\n The math just doesn\u2019t add up.<\/p>\n [\/et_pb_text][et_pb_cta title=”Want to learn more?” button_url=”https:\/\/familyenterpriseusa.com\/polling-and-research\/wealth-tax\/” button_text=”Visit our State and Federal Wealth Tax Tracker – Click Here ” admin_label=”State and Federal Wealth Tax Tracker CTA” _builder_version=”4.27.6″ _module_preset=”default” background_color=”#fc2f36″ custom_padding=”13px||18px|||” global_module=”17129″ global_colors_info=”{}”][\/et_pb_cta][et_pb_divider divider_style=”dotted” disabled_on=”off|off|off” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][et_pb_text disabled_on=”off|off|off” admin_label=”Become a member text” _builder_version=”4.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” link_option_url=”https:\/\/familyenterpriseusa.com\/donate-2\/” global_module=”5822″ global_colors_info=”{}”]<\/p>\n As we prepare for what promises to be a pivotal year for America, we’re asking you to consider becoming a member.<\/p>\n The need for fact-based reporting of issues important to family owned businesses<\/a> and protecting a lifetime of savings<\/a> has never been greater. Now more than ever, successful families<\/a> and family owned businesses<\/a> are under fire. That’s why Family Enterprise USA<\/a> is passionately working to increase the awareness of issues important to family owned businesses<\/a> built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates<\/a>, possible elimination of valuation discounts, increase in capital gains tax<\/a>, enactment of a wealth tax<\/a>, and the continued burden of the gift tax<\/a>, estate tax<\/a> and generation skipping tax<\/a>.<\/p>\n [\/et_pb_text][et_pb_button button_url=”https:\/\/familyenterpriseusa.com\/donate\/” button_text=”Become a Family Enterprise USA Member” button_alignment=”center” disabled_on=”off|off|off” admin_label=”Become FEUSA member button” _builder_version=”4.21.0″ _module_preset=”default” custom_button=”on” global_module=”6503″ global_colors_info=”{}”][\/et_pb_button][et_pb_divider divider_style=”dotted” disabled_on=”on|on|on” _builder_version=”4.27.4″ _module_preset=”default” disabled=”on” global_colors_info=”{}”][\/et_pb_divider][et_pb_video_slider disabled_on=”on|on|on” admin_label=”Video Slider Family Business Stories 1″ _builder_version=”4.27.4″ _module_preset=”default” disabled=”on” global_module=”5963″ global_colors_info=”{}”][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=3k9d1tFz5AU&t=22s” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=kG0lDKbmJxg” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=HFK8SG1VSco” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=Z15BqbFOYck” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=bsn5xYrxhJg” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=PL3K3rK7ioA&t=5s” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][et_pb_video_slider_item src=”https:\/\/www.youtube.com\/watch?v=CpXRbRBhPKc” _builder_version=”4.19.1″ _module_preset=”default” global_colors_info=”{}” show_image_overlay=”off”][\/et_pb_video_slider_item][\/et_pb_video_slider][et_pb_text disabled_on=”off|off|off” admin_label=”FEUSA Statement” _builder_version=”4.21.0″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” link_option_url=”https:\/\/familyenterpriseusa.com\/donate-2\/” global_module=”5910″ saved_tabs=”all” global_colors_info=”{}”]<\/p>\n Family Enterprise USA<\/a> promotes generationally<\/a> owned family business<\/a> creation, growth, viability, and sustainability by advocating for family businesses<\/a> and their lifetime of savings with Congress<\/a> in Washington DC.\u00a0 Since 2007, Family Enterprise USA<\/a> has represented and celebrated\u00a0all sizes, professions and industries of family-owned enterprises and multi-generational<\/a> employers. It is a bi-partisan 501.c3 organization.\u00a0Family foundations can donate.<\/a><\/p>\n [\/et_pb_text][et_pb_text disabled_on=”on|on|on” admin_label=”Hash tags & Tags” _builder_version=”4.27.6″ _module_preset=”default” disabled=”on” global_module=”6498″ global_colors_info=”{}”]<\/p>\n #incometax #CapitalGainsTax #R&DExpensing #DontPunishSuccess #GrantorTrusts #StepUpinBasis #likeKindExchanges #AcceleratedDepreciation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #incometaxrates #repealestatetax #AdvocatingForFamilyBusinesses #FamilyOwnedBusiness #WomenOwnedBusiness @FamilyEnterpriseUSA #FamilyEnterpriseUSA #FEUSA<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" By Patricia M. Soldano President Family Enterprise USAFamily-Owned Businesses Get Hurt When the \u2018Math Doesn\u2019t Add Up\u2019 With New Wealth Taxes Research, History Point to \u2018Wealth Flight,\u2019 Negative Revenue Outcomes with California Ballot Initiative, Federal \u2018Savings Penalty Tax\u2019 Proposals Sometimes it comes down to basic math. Our government spends more than it takes […]<\/p>\n","protected":false},"author":2,"featured_media":17654,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[48,102,92,94],"tags":[],"class_list":["post-17648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-businesses","category-family-business-caucus","category-multi-generational-business","category-pat-soldano"],"acf":[],"_links":{"self":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/17648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17648"}],"version-history":[{"count":3,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/17648\/revisions"}],"predecessor-version":[{"id":17655,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/17648\/revisions\/17655"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/media\/17654"}],"wp:attachment":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/strong>President<\/em>
\nFamily Enterprise USA<\/p>\nFamily-Owned Businesses Get Hurt When the \u2018Math Doesn\u2019t Add Up\u2019 With New Wealth Taxes<\/strong><\/h2>\n
Research, History Point to \u2018Wealth Flight,\u2019 Negative Revenue Outcomes with California Ballot Initiative, Federal \u2018Savings Penalty Tax\u2019 Proposals<\/strong><\/em><\/h3>\n
Ballot Measure Scrutiny<\/strong><\/h4>\n
It\u2019s already triggered \u201cwealth flight.\u201d Many ultra-high-net-worth individuals are relocating their primary residences and corporate headquarters to lower-tax states like Florida and Texas to preempt the tax.<\/p>\nWe hope you’ve enjoyed this article. While you’re here, we have a small favor to ask…<\/em><\/h4>\n
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