Input Stories

On the heels of the first tax season since H.R. 1 passed, manufacturers’ champions in Congress are making the case for the pro-growth measures in the law, driving hiring, investment and competitiveness. The NAM recently spoke with Rep. Randy Feenstra (R-IA), a leading supporter of the Death Tax Repeal Act, about his leadership on reducing the burden of the death tax on small manufacturers.
 
Why he did it: When asked what motivated him to push for H.R. 1, which expanded and made permanent the death tax exemption for family-owned businesses, Rep. Feenstra said, “The need for this extension was critical due to the simple fact [that] if we did not act, the death tax would force family-owned farms, small businesses and manufacturers to break apart or sell off what they’ve spent generations building.”

• “As I traveled throughout Iowa’s 4th District, I heard directly from Iowa manufacturers and producers who were deeply concerned that if we did not provide relief on the exemption, their children would face an egregious tax at the worst possible moment. This tax burden compounds the burden of grief with the burden of financial insecurity and forces many to shut down or sell off their businesses just to pay that bill,” he continued.
• Permanently raising the exemption to $15 million “protects American industry, keeps our Main Streets strong and helps ensure that these businesses stay in Iowa communities—not sold off, shuttered or transferred to foreign ownership,” he said.

Planning for the next generation: Rep. Feenstra emphasized the importance of this provision for allowing families “financial certainty” and “peace of mind.”

• “Under the lower, pre-Working Families Tax Cuts level, a significant portion of the value of [a] business would have been subject to the Death Tax. For the family, that could mean a tax bill so large that they’d have no choice but to sell off equipment, lay off workers or even sell the business entirely just to pay the IRS.”
• Now, “Instead of structuring the entire future of a family business just to pay a bill, families can focus on training the next generation, investing in their operations and continue growing their businesses.”

What he’s heard: “What I’m hearing from family-owned manufacturers across Iowa is the sense of real relief and renewed confidence about the future of their businesses,” Rep. Feenstra said, when asked about manufacturers’ response to the tax law.

• “Before we expanded the exemption, a lot of families were operating under the cloud of uncertainty. I have had conversations with manufacturers who were putting succession plans on hold because they didn’t know what the tax burden would be—some were even unaware they even existed,” he said.
• “Now, with the exemption being raised, that uncertainty has been eased, and families are spending less time on defensive planning and more time focusing on growth.”

What manufacturers should do: In addition to working on their succession plans and investing in growth, manufacturers should “keep sharing your stories,” Rep. Feenstra said.

• “While this increased exemption is critical, our work is not finished until this egregious tax is fully repealed. The most powerful arguments made before the Ways and Means Committee came directly from manufacturers, farmers and Main Street businesses who directly shared what was at stake.”
• “Continue engaging with lawmakers, hosting facility tours, participating in roundtables and making your voices heard. When members of Congress see firsthand how these policies impact jobs, families and communities, it makes a real difference,” he concluded.