This week, Wine & Spirit Wholesalers of America (WSWA)'s Executive Vice President, Government Affairs Dawson Hobbs sent the below letter to Congressional leadership on the treatment of America's family-owned businesses held in trust in the proposed Build Back Better plan:
"The latest language in the House "Build Back Better" framework continues to punish private, family-owned companies that are held in trusts, creating a disproportionate business environment for family-owned businesses versus large, publicly traded corporations.
Family-owned businesses, including America's wine and spirits distributors, have incorporated trusts in their ownership structure for nearly 90 years to ensure their succession from one generation of family ownership to the next.
The $10 million and $25 million thresholds for the proposed surtax would be much lower for family-owned businesses that use trusts –- for those businesses, the surtax is applied on income above $200,000, effectively creating a tax rate of 45 percent, while giant corporations that they compete with would be taxed at 21 percent.
Every rate hike to date has included drastically lower thresholds for trusts and estates than individuals. The headline may say $10 million and $25 million limits, but the surtaxes in the BBB framework would discriminate against family businesses making just a fraction of that.
We hope Congress will consider striking this punitive rule and allowing the trust threshold to be at the same level as individuals."