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According to a new survey, two-thirds of wealthy entrepreneurs accelerated their plans to retire or sell their business during the Covid pandemic, which reflects the new psychological and financial landscape of companies.
According to a Clarfeld Citizens Private Wealth survey, 66% of business owners with high net worth said the pandemic pushed ahead with their plans to sell their business or retire.
Half plan to sell their business as a result of the pandemic.
The survey covered 150 business owners with net worth of at least $ 2 million and more than $ 5 million in investable assets. It was conducted online in July by Ipsos on behalf of Clarfeld, which provides banking and wealth management services for people with high net worth.
Clarfeld said wealthy employers valued their time and their families more during the pandemic and made the decision to retire from work and business.
“They reset their priorities,” said Joannie Bozek, director of trusted services and Clarfeld’s trustee. “His mortality became more real.”
Uncertainty about taxes and the growing likelihood of raising taxes on the rich also puts pressure on business owners to sell. President Joe Biden, the Senate and the House have proposed an increase in the tax rate on capital gains and possible changes in property tax, which would increase the tax cut of any commercial sale. Biden and Democrats in Congress are also proposing higher income tax rates for higher-income workers.
“They realize that, for those who have been successful, now is the time to monetize this business,” Bozek said.
Most plan to sell their businesses to family members. 88% of respondents said they plan to leave their business to a family member, including spouses, children and grandchildren.
The pandemic and the threat of tax increases also made employers think about moving. Two-thirds of wealthy business people surveyed said they have moved their businesses during the pandemic. The main reason: taxes, with 34% moving to states with fewer taxes. The second reason was to be closer to family and the third was distance work, which offers more flexible locations.
Of course, not all companies can move and Clarfeld’s survey focused heavily on the fields of service and technology businesses, which change more easily. However, three-quarters of business people surveyed see themselves physically moving their business over the next three to five years, especially if taxes increase, making states with high taxes like California, New York and New York Jersey are less attractive.
“Remote work easily led to‘ where do I want to live? “If taxes increase and the economy is affected, I think this trend will continue.”