A taxing affair.The "death tax" takes its toll on minority entrepreneurs Once considered a burden of the ultrarich, the federal estate tax has in recent times become the bane BANE. This word was formerly used to signify a malefactor. Bract. 1. 2, t. 8, c. 1. of small business owners. Also known as the death tax, it is levied against any estate worth over $650,O00--with rates that range from 37% to 55%--and is payable in cash no more than nine months after the individual's death. And often minority, family-owned operations that have taken generations to build are the hardest hit. A study conducted by Kennesaw State University Kennesaw State University, commonly known as Kennesaw State, is a public, coeducational university and is part of the University System of Georgia. It is located in Kennesaw, an unincorporated community in Cobb County, Georgia, United States, approximately 20 miles north of in paying estate taxes would make the growth of their businesses more difficult. In fact, 29% felt that if the principal owner of the company died, they would be forced to sell all or a portion of the business to pay off the tax. Employing a long-range long-range adj. 1. Of, suitable for, or reaching long distances: long-range missiles. 2. Requiring or involving an extended span of time: long-range planning. and comprehensive estate plan is one way to offset the effects of the death tax. However, this method is not inexpensive and can take years to implement. But it is less costly than the price the Sengstacke family (owners of the pay. The company drifted into financial limbo limbo In Roman Catholicism, a region between heaven and hell, the dwelling place of souls not condemned to punishment but deprived of the joy of existence with God in heaven. The concept probably developed in the Middle Ages. because of $4 million in estate taxes incurred upon the publisher's death (see "Carrying the Torch," Newspoints, April 1999). In that case, only a potential deal with BE 100s CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Don Borden Bor·den , Gail 1801-1874. American surveyor and inventor who developed condensed milk (1853) and other food products. Borden, Lizzie Andrew 1860-1927. stands between the paper's long history of service and oblivion o·bliv·i·on n. 1. The condition or quality of being completely forgotten: "He knows that everything he writes is consigned to posterity (oblivion's other, seemingly more benign, face)" . But in far too many cases, the death of a business' founder has meant the death of a family business. And that is a blow to us all. Estate Taxes and Family Business(*)
All Firms Farm
Impact of paying estate taxes:
Aware of their estate tax liability 55% --
Less willing to wait for an 36 46%
investment to pay for itself
Less likely to invest in higher 68 68
risk projects
Makes growth of business more 61 --
difficult
Makes survival of business more 64 --
difficult
If due tomorrow, percent selling 33 37
or liquidating
Number of jobs that would be lost 30 23(**)
Percent hiring more people if 60 54
estate tax eliminated
Number of new jobs that would be 5 13(**)
added
Characteristics of businesses:
Year business founded 1953 1954
Percent in first generation 19% 21%
Total number of employees 80 47
Jobs created in last five years -- --
Annual revenue growth over last 7 --
five years
Annual revenue growth over next 6 --
five years (projected)
Sub-group surveys
Black Manufacturing
Impact of paying estate taxes:
Aware of their estate tax liability 43% 65%
Less willing to wait for an -- --
investment to pay for itself
Less likely to invest in higher -- --
risk projects
Makes growth of business more 90 96
difficult
Makes survival of business more 87 93
difficult
If due tomorrow, percent selling 29 31
or liquidating
Number of jobs that would be lost 4 18
Percent hiring more people if --
estate tax eliminated
Number of new jobs that would be -- --
added
Characteristics of businesses:
Year business founded 1984(**) 1957(**)
Percent in first generation 100% 42%
Total number of employees 96(**) 45
Jobs created in last five years 10 9
Annual revenue growth over last -- --
five years
Annual revenue growth over next -- --
five years (projected)
|
|
||||||||||||||||||||||

Printer friendly
Cite/link
Email
Feedback
Reader Opinion