A bipartisan group of senators is pushing legislation to make it easier for employees to gain ownership of certain businesses.
Sens. Ben Cardin (D-Md.), Pat Roberts (R-Kan.) and Olympia Snowe (R-Maine) – all members of the powerful Senate Finance Committee – introduced legislation this week that would roll back obstacles employees face in trying to gain stake in so-called S corporations.
In S corporations, shareholders pay taxes for the company’s income on their personal tax returns. The three senators say the S corporations that operate under employee stock ownership plans have been especially adept at creating jobs and certainty for their workers.
“When employees own the company, they operate with a vested interest in its success, and that in turn generates tremendous returns for the company, the community, and the economy,” Roberts said in a statement. S corporations and other pass-through entities have been a topic of discussion as policymakers look into overhauling the tax code – with some Republicans saying the administration’s concentration on corporate tax reform would leave pass-throughs behind.
The new Senate legislation also looks to provide technical help for companies that would look to install employee stock ownership plans.
A bipartisan group of three dozen lawmakers is backing similar legislation in the House.