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January 23, 2019

Family business owners speak out against state capital gains tax in new AWB video series

By: Andrew Lenderman   Comments: 0
Tina Kenney, co-owner of HPF Manufacturing in Snohomish, plans to sell her family business to fund her retirement. A new state capital gains tax would take a big chunk of her nest egg.
(Photo: Brian Temple/AWB)

Eric Fritch of Fritch Mill says a new state capital gains tax would discourage investment in Washington. (Photo: Brian Temple/AWB)
A new capital gains tax would kill the retirement dreams for many small businesses and discourage new investment in Washington.

That’s the message from Tina Kenney and Eric Fritch, two Snohomish County employers featured in AWB’s new video series, “AWB Amplified.”

AWB visited HPF Manufacturing in Snohomish, where Kenney and Wendell Malmberg manage a custom metal fabrication and design company. This family-owned business has about 15 full-time employees.

“When I plan to retire, I will sell my company, and that’s all the money I will have,” Kenney said. “And capital gains will take a sizable chunk out of that.”

Viewers of the Discovery Channel show “Gold Rush” may recognize HPF Manufacturing. Many of the company’s heavy equipment innovations have been featured on the show. The company created a new undercarriage for heavy-duty excavators that allows them to travel on rail lines. The company also makes excavator attachments like thumbs, buckets, guards and more. One of these special thumb attachments has been attached to an excavator that will help tear down the Alaskan Way Viaduct later this year.

Down the road, Eric Fritch owns and manages Fritch Mill, a small, custom sawmill with 32 full-time employees. It’s a family business founded by his father in 1950.

“The idea of a capital gains tax is ill-conceived, and very regressive when it comes to the health of small business in Washington,” Fritch told AWB Amplified. “Drop the idea.”

Small manufacturers aren’t the only ones with concerns about a proposal from the governor to enact a 9 percent capital gains tax. Michael Schutzler, CEO of the Washington Technology Industry Association, told GeekWire that he’s concerned the proposal – as well as a proposed B&O tax hike on service providers – sends the message to entrepreneurs that they should locate elsewhere.

“That’s the signal it sends,” Schutzler said.

AWB Amplified is a video news package that takes a deeper look at many of the big issues that will impact Washington employers, especially during the 2019 Legislature.

AWB’s Clay Hill is tracking the tax proposal in this year’s Legislature. Contact Hill at ClayH@awb.org or 360.943.1600 to learn more or get involved.

Check out the first edition of AWB Amplified to learn more.

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