Bruce Nevins
CEO and Owner
Grande Harvest Wines
33 Grand Central Terminal
New York, NY 10017
Statement for the Record
U.S. Senate Finance Committee
Federal Estate Tax: Uncertainty in Planning Under the Current Law
November 14, 2007
Chairman Baucus, Ranking Member Grassley and Members of the Committee, I appreciate the opportunity to share my concerns about the death tax.
I am one of many business owners throughout America who is almost exclusively invested in my business – a business my heirs will likely be forced to sell in order to pay the death tax. The irony is that as an entrepreneur and small business owner, I am the very kind of business that every member of congress claims to protect. Please take the time to read my testimony, and understand that the death tax does more to harm small-to-medium sized operations like mine than it does to redistribute the wealth of billionaires.
My company, Grande Harvest Wines, is a retail merchant of fine wine and spirits with stores located in New York and Connecticut. The main store of Grande Harvest Wines is located in Grand Central Station, New York City. I have opened a premium cigar store in Grand Central Station as well, and have plans to open a restaurant in Connecticut. My “wealth” – as far as the IRS will be concerned at the time of my death – is in the building space I rent, the employees on my payroll, and the shelves of wines and spirits I sell. All of the company’s cash assets are reinvested in the company in order to maintain our large inventory.
Due to the complexity of the various state alcoholic beverage laws, I maintain multiple corporate entities to handle my business’s trade with certain states. This means that my already limited capital is spread throughout my business in such a way as to make it near impossible to quickly raise substantial cash. My sons will have no easy way to pay my death tax liability. This will make it necessary to sell substantial assets in order to raise the capital needed. The nature of the business is such that if a significant percentage of the company’s assets were sold, the entire business would become unsustainable and would quickly go under.
I am aware of the need to find alternative sources of cash so that my sons are not burdened by this event. I have taken out multiple life insurance policies, which of course are costing our company a fortune. This is money that we would prefer to invest in expansion and improvement – actions which would lead to more jobs and a stronger local economy. Unfortunately, after spending precious resources on life-insurance, we are coming to the realization that even this will not be enough to meet the death tax’s demands.
Obviously, I will look into further estate planning techniques and hope to find other means by which to preserve Grande Harvest Wines. It is not simply for my sons – three of whom work in the company – but also for our employees and their families that I want to keep the business in operation. Except for my death tax liability, I foresee no reason why the company will not continue to grow and expand under my sons’ leadership. They are already learning the complicated business of importing and retailing wine from around the world. In time, they will take over for me, assuming we have found a way to deal with the death tax.
I find it strange that Congress has not yet addressed a tax which falls so harshly on small business owners such as me. I am certainly no billionaire and have inherited no wealth. This tax will not break up the wealth of a landed family – it will destroy the legacy of an entrepreneur.
The only way to completely eliminate the death tax’s unfair burden on business-owners such as me is to permanently repeal it. My company is valued at close to $6 million, well over the highest proposed exemption amount. With further expansion and the addition of the restaurant, the estimated value of my enterprise will only climb higher. Even so, I am still a “small” business and my personal wealth is minimal. The death tax will continue to threaten Grande Harvest Wine’s viability until it is repealed.
I have worked hard my entire life, paid enormous amounts of taxes - both corporate and personal, have served my country in time of war in Vietnam as a member of the U.S. Army, and have generously contributed to the communities in which I have lived and done business. I employ more than twenty people, providing them with a good living and health benefits. It is an outrage that after a lifetime of paying taxes on my hard earned money, I have to worry about my government threatening to put my heirs (who work hard to grow this company) out of business (and consequently eliminate jobs) due to this horrible and greedy death tax - the most unfair and un-American tax ever instituted!
I urge the Members of the Senate Finance committee to draft and recommend passage of legislation to permanently abolish the death tax.
