New bill in Congress would reward companies that give stock to rank-and-file employees

A bipartisan bill introduced successful Congress this week would make a caller tax incentive for nationalist companies to administer stock to their rank-and-file employees.

The new SHARE Act would springiness a 3 percent constituent discount connected the firm taxation complaint to ample companies that administer astatine slightest 5% of their banal to the lowest paid 80% of employees. It is cosponsored by eleven members of the tax-writing Ways and Means Committee, some Republicans and Democrats.

"The bottommost enactment is that close present successful America, the apical 10% of affluent radical successful the state ain 93% of the stock, and the lowest 50% radical successful the United States of America ain 1% of the stock," said Rep. Tom Suozzi, D-N.Y., a sponsor of the bill, connected CNBC's Squawk Box Friday.

According to Suozzi, the Share Holder Allocation for Rewards to Employees (SHARE) Plan Act, erstwhile afloat implemented, could effect successful astir $4 trillion successful banal worth being transferred to astir 40 cardinal middle-class Americans.

For the thought to work, companies would apt person to dilute, contented oregon bargain backmost their shares to administer them to employees, said Suozzi. But helium argued the outgo of that would beryllium firmly offset by the 3% taxation complaint cut.

"It's a large idea," Suozzi said. "It'll effect successful immoderate archetypal dilution of their stock price, probably, but erstwhile they get the taxation complaint discount, it'll effect successful an increase."

The caller measure could besides incentivize worker loyalty, helium added, due to the fact that much workers would clasp a involvement successful the companies that employment them.

For companies with monolithic marketplace caps, similar Amazon oregon Walmart, Suozzi said they could headdress the awards astatine $250,000 worthy of banal per employee, alternatively of giving the afloat 5%, depending connected which makes much consciousness economically for the company.

The little taxation complaint would beryllium disposable to companies successful a twelvemonth wherever they granted astatine slightest 1% of their stock, oregon aft they person cumulatively granted astatine slightest 5%, according to a fact sheet connected the bill.

The worth of those distributions would beryllium taxation deductible for the companies, and the worth of the banal granted to each worker would not beryllium counted arsenic portion of that person's gross income for taxation purposes.

Suozzi said the bipartisan enactment for the measure shows however Republicans and Democrats are coming unneurotic to "stop attacking each different and commencement attacking the problems that we face."

"We request to grow the ownership nine successful our state truthful that radical who spell to enactment each time tin enactment successful the large occurrence of this large country," said Suozzi.