2017-12-08 / On Second Thought

Your Voice, Your Paper

For 23 years I have had the privilege to work in this state. I’m raising my children in South Carolina and will never leave.

Four years ago, I jumped at the chance to run my own radio station and become a small business owner. I look at this as my foray into the American dream. I am my own boss, derived from very hard work and persistence. I have proudly paid many dues to get to this point and plan on working hard to expand my business and grow it for many years to come. I am now in a position where I can see my future, as well as what I may be able to leave to my children.

I often think about what will happen to my business should anything happen to me. As our elected leaders work in D.C. to compromise on a new tax reform bill, one particular item that impacts all small businesses, and has troubled me for years, is that of the estate tax.

Let me make something clear; right is right and wrong is wrong. I do not have a horse in this race. I don’t have the assets that meet the criteria for the estate tax. That’s why I say this without having a penny to gain. One day? Perhaps. Not today or anytime soon.

National media these days widely perpetrates misconceptions about the tax and further a dangerous and economically unsound idea that my success should be penalized.

Here’s what actually is happening. The estate tax will penalize American families through double taxation.

As a willing and yearly tax paying business owner, I don’t believe it is right to ask my children to pay more, simply when I am gone. In addition, due to the nature of my business being one with many hard and expensive assets (radio and studio equipment), this tax will come at an extreme penalty to my heirs and their ability to maintain ownership over our business. This is because the IRS takes the overall value of everything your business possesses and is valued at upon your death and then taxes roughly 40 percent from that number.

I am just one of many in South Carolina that could be impacted by this, and I am incredibly fearful of this reality.

Like myself, there are 5.75 million privately held employer firms in the country. A huge number spend money every year simply to mitigate the effects of the estate tax. This takes money away from my ability to grow my businesses and create more jobs.

The Joint Economic Committee found the estate tax has destroyed roughly $1.1 trillion in capital stock in the economy. Lost capital means fewer jobs and lower wages. As a national perspective, ending the estate tax would add $119 billion to GDP and boost workers’ income by $79 billion.

In addition, proponents of this tax try and point out how few are impacted. However, according to 2016 IRS data, nearly 700 family farms and more than 2,200 family owned business paid the estate tax in. Since 1995, over 103,000 closely held businesses and roughly 36,000 farms have been forced to pay the estate tax simply because someone has died.

Our South Carolina Senator Tim Scott has voiced his opposition to this tax, and I deeply appreciate his support. He has been a positive leader for change. I hope the Senate chooses to put a full estate tax repeal into their reform bill, where it currently is not included.

According to the Tax Foundation, the repeal of the estate tax will create nearly 160,000 jobs by allowing more capital to be invested in each business. Small businesses as a whole have been responsible for 60 to 80 percent of all net new jobs in the last decade.

It is my hope we can finally see the end of this tax. That we can reward effort and lifetime commitments, by removing a penalty from being successful. We should encourage job growth and new business, and we should protect those businesses as they continue to provide jobs through generations.

Keven Cohen is a 26- year veteran of talk radio and the owner of The Point 100.7 FM in Columbia, SC. Email him at kev@makethepointradio.com

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