Tom Click of Patriot Aluminum speaks to press at the Capitol on Thursday, September 28, the morning after the Trump Tax Plan was announced.
President Trump's plan to revamp the tax code comes with three key provisions that NAED and its member companies have been fighting for over the past decade. The president wants to repeal the Estate Tax, lower the tax on corporations, and cap the tax on small businesses.
During the unveiling of his tax plan, the president described the Estate Tax, also called the Death Tax, as “the crushing, the horrible, the unfair Estate Tax. Or, as it is often referred to, the Death Tax.” The announcement drew long cheers from the crowd that gathered to hear the plan in Indianapolis.
“That means especially for all of you with small businesses, really tremendous businesses, you will be able to leave them to your family and your family won't have to run out to do a fire sale to try to get the money to pay the tax. Lose the business. Ends up going out of business. All of those jobs are lost,” President Trump told the audience. “So that Death Tax is a disaster for this country, and a disaster for so many small businesses and farmers and we are getting rid of it.”
The President also announced a cap on small business taxes at 25%. “This will be the lowest top marginal income tax rate for small and mid-sized businesses in this country in more than 80 years,” the President announced. He added, “To give businesses even more reason to boost their investment in America, for the next 5 years our framework will allow to fully write off, listen to this, the cost of equipment in the year they buy it. That is big. And that's instead of having to take deductions and deduct the cost off over a long period of time. And that's called incentive.”
You can see President Trump's comments on the Estate Tax at 18:59 in this video. The comments on lowering taxes begins at 25:25.
Tom Click of Patriot Aluminum took part in a press conference at the Capitol on Thursday, September 28, the morning after the Trump Tax Plan was announced. Joining Click were Congressman Kevin Brady, Chairman of the Ways and Means Committee, Congressman Peter Roskam, Tax Policy Chair for the Ways and Means Committee, and Palmer Schoening, of the Family Business Coalition and an advisor for NAED Government Affairs. See video of the press conference below.
Click agreed with the president's tax plan, saying, “the current tax code is penalizing our growth.” Click's said his company is trying to remain innovative and compete with foreign competition, but struggles with the Estate Tax and taxes on his investments in equipment. “Full expensing in tax reform is incredibly important to businesses like ours. Full business expensing would allow instant write-offs instead of scheduled depreciation, and this would spur new investment in our business, meaning a greater opportunity to re-shore foreign-made products, creating more jobs, higher incomes, and added certainty,” Click said at the press conference.
Here is the full transcript of Tom Click's comments at the press conference:
“Good morning, my name is Tom Click, I am the founder and CEO of Patriout Aluminum Products based in Louisa, Virginia with my wife Sarah. We are the only American-owned-and-operated family business producing the full lines of aluminum and stainless electrical conduit products. We started operations in 2010 and currently employ 62 employees, which will grow to 75 by the end of the year.
Our growth is one of our greatest strengths, but when it comes time to pay taxes, our greatest threat. The current tax code is penalizing our growth.
Innovating to stay ahead of the curve and foreign competition is hard enough, but the complicated tax and regulatory environment adds an additional hurdle for small businesses to overcome. In order to encourage more hiring and growth in small businesses, my message to Congress and the administration is simple: make taxes and regulations more predictable and less burdensome on American small businesses like mine.
We plan to purchase over $1.5 million in new equipment this year to keep up with the demand of our customers. Unfortunately, our growth has also brought increasing complications. The equipment used to make our products isn't cheap and requires regular maintenance. Currently our operation runs three shifts, five days a week, with our third shift operating fully automated. In order to achieve this productivity and keep our customers happy, we utilize thirteen automated CNC machines, which accounts for $2 million in cost.
Because of this constant growth and innovation, full expensing in tax reform is incredibly important to businesses like ours. Full business expensing would allow instant write-offs instead of scheduled depreciation, and this would spur new investment in our business, meaning a greater opportunity to re-shore foreign-made products, creating more jobs, higher incomes, and added certainty.
Private companies like Patriot Aluminum still pay some of the highest taxes in the industrialized world. A reduction to the small business tax rate would be a welcome relief for family business owners, many of which are also paying state income tax, sales tax, healthcare taxes, and LLC fees. The average family business spends over 80 hours to prepare thousands of pages of tax forms each year. Complying with this number of tax responsibilities can truly turn into a second job for a small business owner.
Fortunately, the new tax plan released yesterday addresses many of the unnecessary complications by reducing the complexity of the tax structure. Small businesses should be making decisions based on industry needs and their customer base, not the whims of Washington bureaucrats.
As a growing family business with many productive years ahead, the estate tax, or “death tax” will pose a significant risk to Patriot's future. Critics often label the estate tax as a “tax on the rich,” but even businesses that don't currently exceed the exemption must begin the costly estate planning process early. The result is a drain of capital from businesses of all sizes that is wasted on lawyers and accountants.
As my business grows it becomes increasingly concerning to me that if I die unexpectedly, the government will take 40 percent of my business in death taxes. To have products on hand for our buyers, Patriot maintains inventories in ten states, and these multi-million dollar, non-liquid inventories are a part of the valuation of my business. Without liquid cash on hand to pay a 40 percent tax bill, my family may be forced to sell parts of the business or lay off workers just to pay Uncle Sam.
As a business owner grappling with a number of taxes and regulations, I'm encouraged by efforts in Congress to simplify and reform the tax code. For us, the tax savings will be invested back into Patriot Aluminum to expand the business and increase hiring.
Investing in the futures of our employees at Patriot Aluminum means everything – approximately half of our production workforce are U.S. Military Veterans. With small businesses like mine seeking tax relief to invest in more growth, now is the time to pass a tax reform package that encourages entrepreneurs to dream big, work hard and restore America's Manufacturing Leadership.”
Take action now – contact your elected representative to let them know your position on tax reform for small businesses.
Tagged with NAED, Palmer Schoening, Patriot Aluminum, President Trump, small business, tED, Tom Click