High Personal Tax Levels Top Concerns of America’s Largest Private Employer, Family Businesses, New Study Finds
New Data from Family Enterprise USA Annual Family Business Survey 2023 Show Taxes, Both Personal and Business, Are Biggest Worries
Sky-high income and business taxes are the top issues America’s largest private employer, family businesses, point to when looking at this year’s economic challenges, a new study finds.
This, according to a Family Enterprise USA Family Business Survey 2023, burdensome taxes top a list of worries family business of all sizes face today. The next greatest worry is finding labor, and then training them to do a job effectively.
The survey assessed a cross section of America’s multi-generational family-owned industries, contributing $7.7 trillion annually to the U.S. gross domestic product. Family businesses account for 83.3 million jobs, or 59 percent of the country’s private workforce, according to research.
Taxes and tax policies were found as the biggest challenges, with 50 percent of respondents saying high personal income taxes were the number one concern, up from 45 percent a year ago, a 10 percent jump.
Some 19 percent of the respondents said the “most important” tax issue was to reduce personal income taxes, while 18 percent said reducing the Estate Tax, or The Death Tax, was also priority. When it came to changing the Estate Tax provision, 33 percent thought it important to keep it “as is,” while 24 percent said this a year ago.
A main factor for this centers on the 80 percent of family businesses operating as “pass-through entities,” which pay 37 percent or more in income tax, while non-pass-through entities, or corporations, pay 21 percent.
“Few people in Congress understand that our tax policies favor corporations while hurting the majority of family businesses, which often pay at personal tax rates of over thirty percent,” said Pat Soldano, President of Family Enterprise USA and the Policy and Taxation Group, both Washington DC-based bipartisan, non-profit family business advocacy organizations. “What came out in this year’s survey is a clear push back on our personal and high business tax rates, but also the strain of high personal taxes on workers,” Soldano said. “Our largest private employer is saying ‘high personal taxation is putting strain on our workers, and our productivity.’”
The Family Enterprise USA Annual Family Business Survey 2023 was conducted in the first two months of 2023. The respondents were 571 family businesses or family business offices from across the country. The study’s main sponsors are Squire Patton Boggs and Brownstein, both leading law and lobby firms advocating for family businesses.
Another primary concern among family businesses was finding, training, and keeping employees, with 31 percent of family businesses and family offices saying this was of critical concern. Shifting “market conditions” were also a key worry, with 30 percent of respondents citing it as a main worry for the coming year.
Despite these concerns, these multi-generational family businesses, 74 percent of which have been in business for 30 years or more, 65 percent expect to grow in 2023 and 71 percent saw their business increase in 2022. Nearly, 40 percent of the respondents have revenues of $21 million or more, according to the survey.
“Family businesses are a driver of the US economy, and they can adapt easier than larger corporations,” said Soldano. “Yet they are often at a disadvantage tax wise and are often penalized for not being set up as a corporate entity.”
The top breakdown of family business industries were 26 percent in manufacturing, 14 percent in construction/facilities, and 7 percent in real estate. Agricultural businesses made up 5 percent of respondents.
“This year’s survey shows once again the resiliency of our country’s family businesses,” said Soldano. “Family businesses keep jobs, add jobs, pay better than average wages, and give back to their communities, all of which are strong arguments to keep our family businesses thriving.”
For the full details of the new “Family Enterprise USA Annual Family Business Survey 2023” can be found at www.familyenterprise.com.
We hope you've enjoyed this article. While you're here, we have a small favor to ask...
As we prepare for what promises to be a pivotal year for America, we're asking you to consider becoming a member.
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 Family Enterprise USA 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. The issues we fight for or against with Congress in Washington DC include 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 gift tax, estate tax and generation skipping tax.
Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC. Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.
#incometax #taxseason #federaltaxpolicy #taxation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #CapitalGainsTax #incometaxrates #incometaxseason #taxrefund #taxreturn #incometaxreturn #gifttax #Generationskippingtax #InheritanceTax #repealestatetax #FamilyBusiness #promotefamilybusinesses #familyowned #supportlocalbusiness #womeninbusiness #AdvocatingForFamilyBusinesses #Generationallyowned #Multigenerationalbusiness @FamilyEnterpriseUSA @PolicyAndTaxationGroup @DitchTheEstateTax #FamilyEnterpriseUSA #PolicyAndTaxationGroup #DitchTheEstateTax