Bill pushing companies to make employees stakeholders gains bipartisan support
Representative Tom Suozzi (D-NY) has introduced bipartisan legislation called the SHARE Plan Act, which aims to encourage companies to make employees partial owners by distributing company stock to them. The bill proposes giving corporations a 3% reduction in their tax rates if they allocate at least 5% of their stock to the lowest-paid 80% of employees. The goal is to help rebuild the middle class and address wealth inequality by making employees stakeholders in their companies. The legislation has gathered support from members of both parties, including Rep. Mike Kelly (R-PA) and other Ways and Means Committee members. The bill also seeks to amend tax rules related to employee stock ownership plans, excluding stock received under the plan from employees’ taxable income.This effort builds on prior bills led by lawmakers such as Rep. John Larson (D-CT) and the late Rep. Bill Pascrell (D-NJ).
Tom Suozzi gains bipartisan support for bill pressing companies to make employees stakeholders
Rep. Tom Suozzi (D-NY) on Wednesday introduced bipartisan legislation that would give companies tax breaks for allowing their employees to own stock more easily.
The bill incentivizes corporations to distribute at least 5% of their stock to the lowest-paid 80% share of employees in exchange for a 3% cut in corporate tax rates. The purpose of the Share Holder Allocation for Rewards to Employees Plan Act is to distribute equity to employees, according to the text.
“Today, I’m introducing the SHARE Plan Act, to rebuild America’s middle class and address our growing wealth inequality,” Suozzi posted on X. “It’s bipartisan. It’s common sense and it will work!”
The New York Democrat has won support from Rep. Mike Kelly (R-PA), the chairman of the House Ways and Means Subcommittee on Tax Policy, and nine additional Ways and Means Committee members from both parties. Committee members who back the legislation include Reps. Brian Fitzpatrick (R-PA), Nicole Malliotakis (R-NY), and Claudia Tenney (R-NY).
The previous version of the bill required certain corporations to maintain stock-sharing plans for their employees as a condition of eligibility for capital gain tax rates, per the old text.
“The bill defines a SHARE plan as a plan requiring such corporations to make periodic distributions of their common stock to participating employees,” the bill’s summary reads. “The bill excludes from the gross income of employees participating in a SHARE plan, for income tax purposes, SHARE plan stock received by such employees.”
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Rep. John Larson (D-CT) led the effort in the 2021-22 congressional session. Suozzi and late New Jersey Rep. Bill Pascrell were co-sponsors of that bill.
The new version seeks to amend the Internal Revenue Code of 1986, which regulates stock-based employee compensation plans.
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