Tax law is an opportunity to pass on more than wealth: Our view
If you thought running a business was hard, you now have a whole new layer of complexity to consider: the new federal tax law.
We applaud the intent of the law: to reduce taxes and spur economic growth. But it will take lots of work for some business owners to make sure they are taking advantage of the law’s provisions.
One provision that should appeal to family-owned businesses in Central Pennsylvania is the increase in the estate-tax exemption to $11.2 million. Experts note that the exemption should make it easier to pass along family businesses. However, that perk expires in eight years, so experts suggest meeting with tax advisers now to map out the best course for you, your family and your company.
We also encourage business owners to consider their communities as they map out succession plans. It should not be difficult.
The bottom line is important but most owners recognize that it is not everything. We see business leaders in Central Pennsylvania routinely stepping up to volunteer time, money and services to charities meeting all kinds of needs.
As business owners do the math and start to see positive effects from the new tax law, we hope they also open their eyes and wallets and re-invest some of that tax savings in their communities.
Nonprofits, of course, are understandably nervous that the opposite might take place — that because fewer people will be itemizing their tax deductions under the new law, fewer people will be donating to worthy causes. While we believe most people give for other reasons, charities may still take a hit. Businesses that reap the rewards of the new tax law can make up any losses by investing more in groups that often struggle for dollars to do good deeds.
The approach would set a good example for the next generation of business leaders — and help instill important values. But it also could help when the tax law’s provisions sunset in the years to come and the argument will need to be made that the law made the country a better place for everyone.