U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, led a hearing to examine the challenges entrepreneurs must navigate during succession planning and the unique circumstances faced by rural and family-owned small businesses. During the hearing, Ernst also focused on the threat of the estate tax, more commonly known as the death or inheritance tax, for wiping out small businesses in rural communities.
“For family-owned businesses, especially farms and other rural small businesses, succession planning is deeply personal. It’s more than a conversation about family finances or selling a business to the highest bidder…small business owners can face significant challenges in keeping their business’s operations going from one generation to the next. The complex, burdensome process can require expensive attorneys, accountants, and business advisors. Navigating the red tape discourages folks, making selling off—or shutting down—their enterprise less of a headache than keeping it open or passing it on to their family.”
“On the federal level, I have long supported repealing the death tax altogether…It is long past time to end the practice of death being a taxable event. Aren’t Americans taxed enough while they’re alive? Do we really need to penalize family members who are grieving their loved ones? Small business succession planning should be easy to understand, easy to navigate, and easy to do. A locally-led approach, informed by the owner’s priorities and vision, must be the standard,” said Ernst.
Ernst heard directly from Iowan Theresa Hildreth, Executive Director of the Calhoun County Economic Development Corporation, about concerns that small business owners and farmers have about the burdens of capital gains taxes when transferring their business from one generation to the next.
