Way back in the fall of 1962, I took a leap and bought my first grain bin to dry and store shelled corn. It took a lot of time and effort to combat difficulties early on as drying was slow and pockets began to overheat and spoil. Ultimately, I came up with idea of adding a horizontal auger through the handle of the drill. I patented the idea and the Stirway stirring machine and Sukup Manufacturing Company was born.
I offer this brief history to illustrate how this company has been my life’s work. I have spent 55 years in its service alongside our wonderful employees. I have worked through failure and paid my dues yearly. We as a company have grown from myself alone to roughly 600 employees today. The key to our success has been innovation and an incredible amount of hard work. We have more than 80 U.S. patents and remain the largest family-owned, full-line grain system manufacturer.
I have so much pride in our company, one that is currently in the hands of our two sons, who have spent their entire lives working as engineers in the business. We also have third generation grandchildren actively working in the business full time. One is our corporate attorney.
We are one of the roughly 5.75 million privately held employer firms in the country. These companies provide jobs and stability to local communities nationwide. For years, the estate tax has threatened the future of these important companies, and it does so in my opinion without much justification for why it is needed.
For those who are unaware, the estate tax comes into play when the owner passes away. No goodwill is given to offset the years of taxes paid, nor the jobs that will be affected. In 2015, the death tax collected $17 billion, less than one percent of federal revenues. Alicia Munnell, a member of President Clinton’s Council on Economic Advisors, found that the death tax imposes compliance costs (tax planning, collection, etc.) in excess of $26 billion. As you can see, this compliance cost exceeds the death tax’s revenue yield. So why are we penalizing families if this tax isn’t even a good revenue generator for our government?
In addition, the money collected from the estate tax was spent by our government in hours. So, the true result of issuing this tax is simply to penalize the remaining family members. The result being, these individuals now must figure out how to maintain their businesses that have been catastrophically affected.
According to 2016 IRS data, nearly 700 family farms and more than 2,200 family owned business paid the estate tax in 2016. Since 1995, more than 103,000 closely held businesses and roughly 36,000 farms have been forced to pay the estate tax simply because someone has died. This tax has a bigger effect than we are being led to believe by its proponents.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Thank you for signing up for our e-newsletter!
You should start receiving the e-newsletters within a couple days.
The estate tax is double taxation and a fatal blow to the family’s ability to keep their businesses intact.
Family business is the backbone of our nation. Owners spend years paying taxes and providing jobs. Small (and often family-owned) businesses have been responsible for 60 to 80 percent of all net new jobs in the last decade, according to the Tax Foundation. The repeal of the death tax will create nearly 160,000 jobs by allowing more capital to be invested in the economy. It is my hope that our elected leaders finally will end this unfair tax. Simply put, it is hugely destructive and unfair to tax ones’ death. The ramifications impact valuable jobs when businesses are sold off or closed to pay off what is owed.
Should this tax continue we will see businesses that have sustained local communities for generations, reevaluate their futures. Often, the cost of staying in business is too high, and businesses are sold or moved to new locations. Jobs are lost and family businesses that have been built from years of hard work, close.
Let’s hope that our elected leaders fully repeal this tax once and for all. Death by itself, should not be a taxable offense.
l Eugene Sukup is chairman of the board of Sukup Manufacturing Co. in Sheffield, Iowa.