{"database": "press", "table": "releases", "rows": [["https://www.grassley.senate.gov/news/news-releases/grassley-emphasizes-value-esops-bring-local-economies-at-ia-ceo-conference", "Grassley Emphasizes Value ESOPs Bring Local Economies at IA-CEO Conference", "2024-10-16", "2024", "2024-10", "Republican", "Senate", "IA", "Chuck Grassley", "G000386", "www.grassley.senate.gov", "grassley", "https://www.grassley.senate.gov/news/news-releases", "scraper", "POLK COUNTY, IOWA \u2013 U.S. Sen. Chuck Grassley (R-Iowa), a senior member and former chairman of the Senate Finance Committee, today delivered a keynote address at the 2024 Iowa CEO Employee Ownership Conference in Ankeny.\n\nGrassley discussed the future of our nation\u2019s business landscape as the baby boomer generation enters retirement, as well as his longstanding support for Employee Stock Ownership Plans (ESOPs): \u201c[\u2026T]his tax-advantaged tool has helped boost productivity, create wealth among the workforce, expand prosperity and grow civic roots in communities across the country,\u201d he said.\n\nDownload photos HERE. Grassley\u2019s prepared remarks follow.\n\nIowa Center for Employee Ownership (IA-CEO)\n\nEmployee Ownership Conference\n\nFFA Enrichment Center/DMACC Campus, Ankeny\n\nWednesday, October 16, 2024\n\nGood morning. It\u2019s good to be here with all of you.\n\nThank you, Randy, for your work with the University of Northern Iowa (UNI), a school near and dear to my heart. And thank you for the invitation to speak about another subject near and dear to my heart: building prosperity for Iowans across our state.\n\nNow, typically, I wouldn\u2019t be able to join you in person on a weekday in the middle of October. But since we\u2019re in the thick of a presidential election year, Congress is out of session until after November 5th.\n\nAs you know, we\u2019re also in the thick of harvest season. This week, my son and grandson are on our family farm in New Hartford running the combine and hauling grain from the fields.\n\nI\u2019m the second generation of our fourth-generation family farm, so I understand what weighs on the minds of Iowans looking to pass on the reins of a farm or small business. Although, a farmer never really retires.\n\nLike most family farms in Iowa, a lion\u2019s share of our small- and medium-sized businesses are owned by baby boomers. These operations are expected to change ownership in the next five to 10 years. Finding the future stewards of these farms and businesses is top of mind for communities across Iowa.\n\nIt will have tremendous impact on the tax base, population, school enrollment, jobs, economic vitality and social capital of the local and regional community.\n\nThis year, I completed my 44th year holding question-and-answer sessions with Iowans in all 99 counties in our state. Two issues that regularly come up at my meetings with small businesses and manufacturers are workforce shortages and employee retention.\n\nThe workforce and succession planning are top of mind for so many small businesses in Iowa, including those of you here in this room. As the baby boom generation prepares to pass the torch, a sizeable segment of our state\u2019s economy will hinge on the strategic transition of farms and businesses.\n\nChanging ownership of a business the same family has owned and operated for decades is complicated. Potential buyers and sellers need to navigate a maze of issues, including complex family dynamics, taxes, financing and more.\n\nA decade or so ago, the impending demographic shift was often referred to as the Silver Tsunami. Since 2011, roughly 10,000 Americans turn 65 every day. I would suggest the so-called tsunami has delivered rolling waves of changes, instead of catastrophic disruptions to health care, housing, transportation and community services. I attribute that to forward-thinkers, like those of you attending today\u2019s conference.\n\nWe\u2019ve seen across many sectors of the economy that not all of the demographic disruptions hit the fan at once.\n\nThat\u2019s partially because people are staying in the workforce longer, by choice or financial necessity.\n\nLike I said earlier, a farmer never really retires. The same often goes for a family-run business, perhaps due to the fact owners don\u2019t always have a viable succession plan or buyer. Having a succession plan can give families, landowners and small businesses much-needed peace of mind. After putting years of sweat and investments into their farm or business, many Iowans are what we call cash-poor and asset-rich.\n\nAs we look ahead to this era of transition in business ownership, it\u2019s important for leaders in government, business and academia to collaborate. Together, we can anticipate the challenges and embrace the economic opportunities this demographic shift will present.\n\nFrom that standpoint, I applaud the efforts of your organization, in partnership with my alma mater, UNI.\n\nI want to commend you for taking a proactive approach. You\u2019re grabbing the bull by the horns to identify the obstacles and possibilities that lie ahead. By engaging stakeholders and raising public awareness, your efforts can help expand local economic vitality and prosperity for generations to come.\n\nYou understand that a majority of the businesses owned by baby boomers will close for good if a viable buyer isn\u2019t found. Usually, a viable buyer is restricted by the sale price, or there simply isn\u2019t a buyer available at all.\n\nLet\u2019s not underestimate the benefits your efforts will bring workers and the community. Day in and day out, workers help build and grow a company. When workers are able to capture financial equity in their employing business, it fosters an ownership culture that strengthens morale and reinforces roots in the community.\n\nThese dynamics sow the seeds for broader advantages for nearby schools, civic clubs, volunteer fire departments, places of worship, and more.\n\nIf you think about it, your mission kills two birds with one stone. On the one hand, you provide an off-ramp for business owners to pull wealth from their business, monetizing the retirement nest egg they\u2019ve feathered for decades.\n\nOn the other hand, you\u2019re expanding ownership opportunity and offering a piece of the financial pie to the workforce, empowering employees to share in the fruits of their own labor.\n\nAs a former chairman of the Senate Finance Committee, fostering economic growth is central to my philosophy on tax policy. That includes my support for federal tax advantages for Employee Stock Ownership Plans.\n\nEverything these days goes by an acronym, but \u201cESOPs\u201d have been around for decades.\n\nA century ago, big corporations like Proctor & Gamble, J.C. Penney and Sears Roebuck provided stock ownership through a tax vehicle Congress added to the federal tax code in 1921.\n\nThe iteration we have today sprang up in the 1950s, for the purpose of transitioning ownership of a company to its employees.\n\nESOPs were formally recognized in law in 1974 thanks to the efforts of Senator Russell Long - one of my predecessors at the helm of the Senate Finance Committee.\n\nAn ESOP allows companies to use IRS tax-qualified plans as a tool for business succession, and as a workplace empowerment tool to foster an ownership culture. They provide the seller better options to manage tax liabilities from the sale of the business rather than what many consider tax confiscation at the point of sale.\n\nSenator Long once declared ESOPs would be the perfect elixir to the economy. In fact, he used the term \u201cGeritol,\u201d if anyone here remembers that once-popular vitamin supplement.\n\nThe good news is ESOPs have outlasted Geritol. For decades, this tax-advantaged tool has helped boost productivity, create wealth among the workforce, expand prosperity and grow civic roots in communities across the country.\n\nWhen Congress passed the Tax Reform Act of 1984 that included tax-free, roll-over treatment, Washington cleared the path for privately held businesses to transfer ownership, unlocking a burst of economic activity and new ownership to the next generation of employees.\n\nA decade later, the Small Business and Jobs Protection Act of 1996 primed the pump for another wave of growth for employee ownership. In the act, Congress amended S corporation laws to permit ESOPs as eligible shareholders.\n\nTo this day, ESOPs are a preferred tool for business succession in America.\n\nFrom my platform on the Senate Finance Committee, once again, I will have a front row seat at the tax policymaking table in the new Congress. With 2025 will come a major tipping point for the U.S. economy, as lawmakers and a newly elected president confront a tax cliff. The Tax Cuts and Jobs Act that I helped shepherd into law in 2017 is set to expire at the end of next year.\n\nThis package enacted across-the-board tax cuts for every American taxpayer. As a result, businesses and families kept more of their hard-earned money in their pockets.\n\nThat means Iowans got to save, spend and invest more of their own money. If the 2017 Trump tax cuts expire, we will say good-bye to trillions of dollars in tax breaks.\n\nThe 2017 tax law also unlocked opportunities for small business across our state \u2013 the engines of the nation\u2019s economy. Whether a business was structured as a \u201cC\u201d corporation or subchapter \u201cS,\u201d the law lowered tax rates on their income. This tax cut applies to ESOPs with partial employee-ownership.\n\nThe law lowered the maximum corporate tax rate from 35 percent to a single marginal rate of 21 percent, empowering businesses to expand, hire more people or raise wages.\n\nJust as importantly, for pass-through businesses the law lowered tax rates across the board and created a new 20 percent business income deduction.\n\nTogether, those reforms shrunk the top federal income tax rate from 39.6 percent to 29.6 percent. Farmers and small businesses operate on tight margins. These tax breaks make a tremendous difference on the bottom line.\n\nI\u2019m always on the lookout for ways to continue to build on the success of ESOPs. A provision I\u2019ve long cosponsored to make ESOPs a more attractive option for S corporations was incorporated into the SECURE 2.0 Act, which Congress passed at the end of 2022.\n\nI\u2019ve written tax policy in the U.S. Senate for more than four decades and counting. I\u2019ll let you in on a secret: When you tax something \u2013 anything \u2013 you get less of it.\n\nTax laws influence purchase decisions on items ranging from cars and clothes to farm machinery and investments. Just consider back-to-school tax-free shopping weekends. Or how states with no state income tax attract people from high-tax states.\n\nOn the flip side, high taxes on cigarettes, gambling and alcohol aim to limit those behaviors. Tax incentives operate the same way, informing research and development, college savings and homeownership.\n\nI\u2019m sure many of you want to know what\u2019s going to happen on those expiring tax cuts in 2025. That crystal ball will get some clarity after November 5th.\n\nIn closing, I want you to know I agree ESOPs are a key instrument for communities to foster economic prosperity across our state.\n\nOwnership is a core principle in America\u2019s promise of prosperity -- and freedom itself -- that our nation\u2019s Founders enshrined in our Constitution.\n\nIn my 99 county meetings, I\u2019ve seen good things happening and economic vitality thriving in communities with ESOP-structured businesses.\n\nESOPs can provide that pathway to prosperity.\n\nBusiness owners preparing to retire can get tax-advantaged cash in their pockets, after many years of building their business.\n\nEmployees can build equity in the company and find greater satisfaction on the job.\n\nWith your advocacy, communities can realize more opportunities to keep valued businesses thriving and tap into the ownership culture that attracts a dynamic workforce.\n\nThank you again for inviting me to speak to you today. I look forward to continuing this conversation and welcome your feedback. I\u2019m happy now to open up the floor to questions.\n\n-30-", 1, "2026-03-30T01:40:41Z", "2026-04-07T21:57:20Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://www.grassley.senate.gov/news/news-releases/grassley-emphasizes-value-esops-bring-local-economies-at-ia-ceo-conference"], "units": {}, "query_ms": 2.658350858837366, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}