I have always opposed
the US Estate Tax and viewed it as the punishment for the families who made the
US succeed in the Industrial Revolution. This included JP Morgan, Edison,
Tesla, Vanderbilt, Astor, Carnegie, Ford and Rockefeller. These were the good guys
who established our economy. They invented electricity, built the railroads and
all the manufacturing industries that provided our luxuries and standard of
living. They were forced to give their fortunes to “trusts” that have turned
into socialist propaganda factories. Thank a Congressman.
Our railroads would
have gone broke if JP Morgan had not consolidated them so they could pay off
their big construction loans. The SEC would not allow that these days.
I was glad to see the
estate tax exclusion raised from $5.49 million to $11.18 million for 2018. The tax is 40% for every dollar over the
exclusion, plus loads of lawyer fees. This will allow small farms and small
businesses to pass to family members unmolested. Even at $11.18 million,
businesses are likely to keep their taxable value under $11 million.
The estate tax has
been the destroyer of millions of family farms and family businesses for over
100 years. But this new exclusion still misses the mark to protect family farms
and private companies worth more than $11 million.
The advantages of a
family owned business is that they are able to plan for the long term and make
decisions based on building, maintaining and improving the business. I’ve
worked for these companies and one of them was Schwan Foods.
Marvin Schwan died of
a heart attack in 1993 at age 64. He was the founder and owner of Schwan
Foods. Marvin established Schwan Foods
as a farm route delivery service to sell ice cream made at the family
restaurant. When Marvin died, Schwan Foods was valued at $869,456,800.
His older brother Al
took over as President. Al was a World War II fighter pilot, got a degree in
engineering and was Chief Engineer at John Deer when Marvin recruited him back
to the family business.
The Estate Tax exemption
was $500,000 and the tax was 55% The Estate Tax bill for Schwan Foods was
$415,450,079 plus 181,921,766
Marvin Schwan started
the company in 1952. His parents owned a
restaurant in Marshall MN and made their own ice cream. Marvin graduated from Community College,
bought a truck for $100, loaded dry ice and ice cream in the truck and drove
down the road to sell it to the family’s restaurant customers. They bought all the ice cream, because it was
the best. Marvin then hired his first
“driver-salesman” and took him on the route to introduce him to the customers.
When the word got around that you could get Schwan’s Ice Cream delivered to
your farm, the routes exploded. Marvin
quickly added frozen steak, fish and lobster to the product line and started
buying bigger refrigerated delivery trucks. By 1970 customers were calling for
a “premier” frozen pizza, so Marvin bought Tony’s Pizza in Salina Kansas,
because it was the best. Production was set up in Salina and pizza was
blast-frozen to ensure freshness.
When I joined Schwan’s
as Personnel Manager in 1975, the company had revenues of $150 million a year
and had 3400 employees. We automated
pizza production and when I left Schwan’s, our revenues were $650 million a
year and we still had 3400 employees. I
reported to Marvin’s brother Al, but talked with Marvin often. These were the
best guys on the planet and when I left I knew their future was established. I
had been offered a promotion to move from Salina KS to Marshall MN, but my wife
turned it down.
Schwan’s Company is
currently a $3 billion company with 11,000 employees.
The Estate Tax
puts term limits on US industries, when term limits should be applied instead
to politicians. Companies need to be able to retain earnings and reinvest these
earnings back into the business. We would not have succeeded in the Industrial
Revolution if the founders of our economy had to deal with today’s federal
taxes and regulations. Companies need to own their land and buildings and not
ever pay rent or interest. They need to buy everything at low price and best
value. The need to consolidate as needed and break up when appropriate. As
consumers, they need a free market economy based on supply and demand to
control prices.
We need to
separate commerce from government control and we need to separate government
from corporate control. The exception would be government’s ability to impose
tariffs against unfair trade practices of foreign companies. We need to do this
to protect our jobs and our industries. I would eliminate all subsidies and let
the free market govern commerce.
Norb Leahy, Dunwoody
GA Tea Party Leader
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