Good Developments in Worrisome Times provides an ESOP legislative update, focusing on the ESOP champions in the The 111th United States Congress and discussing the importance of having ESOP allies in Congress:
While a member of Congress co-sponsoring a bill that a private sector group likes does not guarantee that the member will vote to protect the group's interest in a difficultly negotiated committee bill to raise taxes for example, it is evidence that he or she is more than likely to be an ally in the crunch. For example, let's assume that the Senate Finance Committee is to raise taxes by $150 billion, and the Administration has made 25 proposals to raise the taxes, and one is to cutback on an ESOP tax benefit. There will be among the 24 other proposals some tax benefits that are near and dear to the men and women who have co-sponsored Senator Lincoln's bill. Will they, behind closed doors, fight against the ESOP proposal, or will they stand aside on the ESOP proposal in order to protect something among the other 24 near and dear to their state's interests? One never knows ahead of time. But someone who has publicly declared for ESOPs by co-sponsoring a bill promoting ESOPs, is more likely to stand for ESOP behind closed doors than someone who has not publicly indicated support for ESOPs. This observation is true in the House as well, and is the key point of TEA's strategy that the best defense be a good offence in the legislative struggles.
So, why is all of these new and renewed support for pro-ESOP bills from members of Congress important? Well, back to the big picture—Congress and the Administration will soon be raising taxes to close the Federal deficit, as was the case in the 80s. And, as was the case in the 80s, cynics about ESOPs working in key staff positions for Congressional committees, and in key Federal agencies that regulate ESOPs, will propose cutting back, or eliminating ESOP tax incentives. So, crunch time may be around the corner, and the ESOP community will urge its publicly declared champions to stay the course for ESOPs.
It also provides a recap of the current ESOP legislation:
- S. 2914: United States Employee Ownership Bank Act
- S. 2909: WORK Act
- H. Con. Res. 204: Expressing continued support for employee stock ownership plans
- H.R. 3586: S Corporation ESOP Promotion and Expansion Act of 2009
- S. 1612: Employee Stock Ownership Plan Promotion and Improvement Act of 2009
- H.R. 692: To amend the Internal Revenue Code of 1986 to exclude from gross income compensation received by employees consisting of qualified distributions of employer stock
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