The latest from NFIB’s “In Their Own Words” series including news reports in local Washington state media outlets
NFIB member Mike Gilmartin is the CEO of Commercial Creamery in Spokane, Washington. His story was featured in NFIB’s latest In Their Own Words series video and he discussed his fears about the Biden Administration’s tax plans. The response from small business owners speaking out against tax increase proposals in Congress is resounding in states across the nation. You can read more about it via The Center Square in Spokane, Washington and NBC Right Now in Kennewick, Washington who reported on Mike’s story.
A $3.5 trillion budget reconciliation bill being written in Congress may not only increase taxes for business owners, but also repeal stepped-up basis which would be especially harmful to America’s family-owned businesses and farms. Repealing stepped-up basis would mean survivors of a deceased small business owner could face a substantial tax bill, and when added to other death taxes the prospect of continuing a family business can become dire and unaffordable. Many small businesses’ value comes from property or equipment, so they wouldn’t have the needed money on-hand to pay the new proposed taxes. A recent study commissioned by NFIB and tax survey show repealing stepped-up basis would force many family-owned businesses and farms to downsize or even sell their business or property just to pay.
Mike acquired his shares of his company in 1977 so the capital gains have grown over time. He is concerned that eliminating stepped-up basis would hurt the next generation of Commercial Creamery owners. “When one of the third generation dies and the next generation that was going to inherit that can’t pay the tax, then what do we do?” Mike asks in the video. The surviving family business owners may be forced to sell their shares to pay the tax bill.
If Congress moves forward with repealing stepped-up basis, surviving family business owners would be faced with a capital gains tax right away at the death of a family business partner, and that tax may force them to bring in outside investors. “At that point it could be the start of a slippery slope where the family ends up losing control,” Mike said. He also fears for the employees that the Spokane operation would be closed for efficiency and that benefits would be cut for the Idaho employees.
Mike calls on Congress to consider small businesses when discussing changes to the tax code. “If you do away with a stepped-up basis, you might be doing away with family businesses. You’re saying, ‘well we don’t value family businesses so let’s make it harder for them to pass those farms and ranches and small businesses on’. Is that really what you want?”
This week, the In Their Own Words series continues with a video featuring NFIB member Julia Yearian, Vice President of Bauguess Electric in Delaware. Julia fears the tax increases being considered in Congress – especially threats to the Small Business Deduction – will jeopardize her ability to increase wages and provide additional benefits to her employees. “We feel the need that the employee has to feel appreciated and that’s what we used that money for. Now, any tax increase that might overturn that or simply increase corporate taxes, you have to find that money somewhere,” Julia said. “That money doesn’t just come out of nowhere.” Watch Julia’s story here:
The ongoing video series In Their Own Words features small business owners from around the country and is a part of NFIB’s Small Business Survival campaign, a coordinated advocacy effort that highlights why tax increases would be harmful to America’s small businesses.
Right now, you can help to make the voice of small business heard in Congress, in three important ways:
- In the next two weeks, many U.S. Senators and Representatives are hosting in-person or virtual townhall-style events in their communities. You can check their websites and social media pages to find a meeting you can attend. Click here for tips on effectively communicating with your lawmakers.
- See what other small business owners are saying in NFIB’s In Their Own Words video series and email us to tell your story too.
- Email your members of Congress concerning the tax increases and mandates that threaten to break Main Street’s fragile recovery. Our simple Take Action system makes it easy to customize your message when you: