4:46 PM, Jul 16, 2015 • By DANIEL HALPER
Hillary Clinton has unveiled a "profit sharing" tax plan. The details of the plan have been published on her website.
"Clinton’s Plan for a Profit Sharing Tax Credit," the headline of the item on Clinton's website reads.
Hillary Clinton believes the central economic challenge in America today is achieving stronger and steadier income growth. While corporate profits are near record highs, everyday Americans' paychecks have barely budged in real terms. Clinton's vision for the country’s economic future prioritizes a rise in incomes for hard-working Americans so they can afford a middle-class life.
Today in New Hampshire, Clinton outlined one idea to address this key challenge: encouraging companies to share their profits with American workers. She outlined a key proposal to give workers the chance to share in the profits they help produce.
A Win-Win: Profit Sharing Is Good for Workers and Good for Business
Under profit-sharing arrangements, companies agree to distribute to workers a specified share of business profits. There is strong evidence that profit sharing is a win-win for both workers and business:
- Profit sharing gives workers a stake in the company. Under profit-sharing arrangements, when a company does well, the workers share in the gains they helped produce. So when corporations see the type of near-record profits they have recently, not only would the executives and shareholders do well – the workers would too.
- Profit sharing increases worker pay. Evidence shows that profit-sharing arrangements are linked with higher pay. If a worker is enrolled in a good profit-sharing plan, that could mean a raise of thousands of dollars.1
- For example, Professors Richard Freeman, Joseph Blasi, and Douglas Kruse of Harvard and Rutgers find "strong evidence" that profit sharing has "meaningful impacts on workers' wealth" because "[w]orkers with profit sharing or employee stock ownership are higher paid and have more benefits than other workers."2
- Profit sharing makes businesses more productive and innovative. Studies find that profit-sharing plans on the whole result in increased business productivity and innovation.3 This makes sense: when employees share in profits, they have a stronger stake in the company's success.
- Profit sharing improves the workplace. Profit sharing has also been associated with other improvements in the workplace – including better employee training, lower employee turnover, and increased employee participation in decision-making.4 In fact, evidence suggests that profit-sharing leads workers to be more satisfied with their jobs overall.
Today, Clinton Outlined Her "Rising Incomes, Sharing Profits" Tax Credit
Expanding profit-sharing – by offering incentives to help businesses cover the initial costs of setting up a plan and overcome the inertia of a "business as usual" mentality – would be a win-win for America's workers and businesses. Clinton would encourage companies to share profits by offering them a tax credit for sharing profits with employees.
Specifically, Clinton's "Rising Incomes, Sharing Profits" tax credit would:
- Award a two-year tax credit to companies that share profits with their employees. Under Clinton's plan, companies that share profits with their employees would receive a two-year tax credit equal to 15 percent of the profits they share – with a higher credit for small businesses. Shared profits eligible for the credit would be capped at 10 percent on top of employees' current wages. This would help companies overcome any initial costs of setting up a profit sharing plan. After two years, companies that have established profit sharing plans and enjoyed the benefits of them would no longer need the credit to sustain the plans.
- Target the workers and businesses that need profit sharing the most. The tax credit would phase out for higher-income workers, and it would only be available to firms that share profits widely among employees. Moreover, the benefit for any single company in a given year would be capped to prevent an excessive credit for very large corporations.
- Work with business, labor and other stakeholders to tailor the specific dimensions of the credit. Clinton believes broad engagement should help shape the precise elements of the credit. That's why, as president, she would direct her Treasury Secretary to convene small businesses and corporate leaders, labor leaders and other stakeholders to determine, among other things, the characteristics of qualifying profit-sharing arrangements and to develop protections against abuses – such as stopping companies from limiting or gaming wages and benefits to get the tax credit.
- Be fiscally responsible. The overall cost of the tax credit is expected to be roughly 20 billion over the ten-year budget window and will be fully paid for through the closure of tax loopholes that she will identify as part of the comprehensive agenda that Clinton will introduce in the weeks and months ahead. This investment will create a significant boost to the economy by putting more money in the pockets of millions of working Americans.
Clinton's "Rising Incomes, Sharing Profits" Tax Credit represents exactly the kind of common-sense solutions that she will offer as President. And Clinton will continue to consult with private sector leaders, labor leaders, experts, and other stakeholders, and propose additional ideas on profit-sharing over the course of the campaign.
8:02 AM, Jan 17, 2014 • By DANIEL HALPER
In a speech about Obamacare on the floor of the Senate, Ted Cruz made the argument that the president's signature legislation, Obamacare, is causing income inequality in America to worsen:
Here's the relevant part of the transcript:
8:52 AM, Jan 11, 2014 • By DANIEL HALPER
New York City mayor Bill de Blasio spent nearly half a million dollars on his inauguration on January 1. $35,250 of that was for a Teleprompter.
Via Capital New York:
9:03 AM, Aug 23, 2013 • By JEFFREY H. ANDERSON
President Obama likes to talk about income inequality, but what matters far more is the actual income of the typical American. And how has the typical American household income fared on Obama's watch? Well, the economic "recovery" has now spanned an Olympiad, and during that time the typical American household income has not only dropped—it has dropped more than twice as much as it did during the recession.
12:57 PM, Mar 14, 2013 • By DANIEL HALPER
Louisiana governor Bobby Jindal introduced his plan to eliminate income taxes, his office announced.
8:02 AM, Sep 27, 2012 • By JEFFREY H. ANDERSON
Americans must be wondering how much more of this “recovery” they can afford. New figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the typical American household’s real (inflation-adjusted) income has actually dropped 5.7 percent during the Obama “recovery.” Using constant 2012 dollars (to adjust for inflation), the median annual income of American households was $53,718 as of June 2009, the last month of the recession. Now, after 38 months of this “recovery,” it has fallen to $50,678 — a drop of $3,040 per household.
11:00 AM, Jun 1, 2012 • By JAY COST
The May jobs report came out today and showed an economy barely adding any jobs: Just 69,000 were added last month, and the unemployment rate increased. This follows news yesterday that GDP was revised downward for the first quarter, and a report today that real incomes remain essentially unchanged.
12:16 PM, Apr 16, 2012 • By DANIEL HALPER
Democratic National Committee chief Debbie Wasserman Schultz has been called on to release her personal income tax returns. The request was made by her congressional opponent, Republican Karen Harrington of Florida.
9:24 AM, Nov 23, 2011 • By JEFFREY H. ANDERSON
The Washington Post’s Greg Sargent claims to debunk the conservative argument against raising taxes on wealthier Americans, by drawing attention to “how much the share of their own income they are paying in taxes” and observing how much that share “has shrunk” (italics in original). But the facts don’t back him up.
We have a spending problem and a growth problem — in that order.10:03 AM, May 23, 2011 • By JEFFREY H. ANDERSON
On Meet the Press, Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, said that “political courage on the Republican side means taking on the revenue piece” of the deficit equation. In other words, it requires Republicans to support raising taxes. Time’s Mike Murphy and NBC’s Andrea Mitchell agreed. But these assertions belie the facts.
The U.S. tax code is unsustainable.12:00 AM, Jan 15, 2010 • By J.T. YOUNG
Last year’s unsurprisingly dismal budget numbers contain a surprising revenue story. While overall federal revenue fell precipitously, payroll tax revenue barely dipped at all. This divergent tale of two taxes has one conclusion but many implications. America’s tax system, decidedly tilted toward upper income earners, is precariously balanced. It is not only volatile in economic downturns – it is unsustainable long term.
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