Education of State Representatives and Senators on the Benefits of ESOPs

Retiring members of the Baby Boomer generation (70M) will transition 10 Trillion dollars of assets, which will include the sale of 12 Million businesses over the next 10-15 years.  This presents a huge opportunity to increase employee ownership.

Party Platforms

At the national level, the Republican party specifically calls out support for employee ownership in the party platform.

Republicans believe that the employer-employee relationship of the future will be built upon employee empowerment and workplace flexibility. We therefore endorse employee stock ownership plans that enable workers to become capitalists, expand the realm of private property, and energize a free enterprise economy. - 2016 Republican Party Platform, page 8.

However, there is no such support for employee ownership, or employee stock ownership plans included in the state level Republican party platform.  Every two years the Indiana Republican Party embarks on a statewide effort to craft the Indiana State GOP platform using the ideas and expertise of Hoosiers.  To be a part of this proceess, Republican minded employee-owners need to  attend and participate in a Platform Committee Hearing when those are scheduled next year (2018) to bring up support for a platform element on employee onwership in front of the Committee.  


 

At the national level, the Democrat party does not specifically call out support for employee ownership.  However, the platform does address profit sharing. 

Corporate profits are at near-record highs, but workers have not shared through rising wages. Profit sharing is linked to higher pay and productivity. That is why, working with business, labor, and other stakeholders, we will incentivize companies to share profits with their employees on top of wages and pay increases, while targeting the workers and businesses that need profit-sharing the most. - 2016 Democratic Party Platform page 5.

At the state party level, there is no support for profit sharing, nor employee stock ownership plans included in the Democratic party platform.  Every two years the Indiana Democratic Party embarks on a statewide effort to craft the Indiana State Democratic platform using the ideas and expertise of Hoosiers. To be a part of this proceess, Democratic minded employee-owners need to attend and participate in a Platform Committee Hearing when those are scheduled next year (2018) to bring up support for a platform element on employee onwership in front of the Committee.Democratic employee-owners need to get involved in the party congress to ensure there is a platform element that supports broad based employee-ownership and Employee Stock Ownership Plans.


 

Pro-ESOP State Legislation

As reported in the National Law Review  the states of Pennsylvania, Iowa, New Jersey, Virginia, and Nebraska have all passed pro-ESOP legislation.  

2012, Iowa passed HF 2085 that provides a tax deduction on qualifying sales to Iowa-based ESOPs, in essence an Iowa  resident who sells to an ESOP (more than 30% of the company) may take a 50% capital gain deduction on their state taxes.

2016, Missouri passed H.B. 2030 that provides a tax deduction on qualifying sales to Missouri-based ESOPs, in essence a Missouri resident who sells to an ESOP may take a 50% capital gain deduction on their state taxes.

2017:

  • Massachuetts through a spending bill re-funded the Massachusettes Employee Ownership Center.
  • New York passed AB 5191  which establishes a 12-member advisory panel on employee-owned enterprises.
  • Colorado, HB17-1214 passed  which encourages employee ownership of Colorado's existing small businesses.
  • Texas has bill H.R. 4171 under consideration that would allow an employee-owned company designated as a historically underutilized business to retain its status if it converts to an ESOP.

2018:

  • Maryland SB0498 has been introduced which allows a subtraction modification under the State income tax for income from a qualified transfer of stock or membership interest of a Maryland corporation or limited liability company to certain employee ownership entities.
  • Maine LD1338 has been introduced An Act To Create and Sustain Jobs through Development of Cooperatives and Employee-owned Businesses.  This bill excludes from Main income tax any gain recognized by a business owner in transferring the business to an ESOP, and the intrest from loans that finance transfers of ownership from a business to an ESOP.

 

What about Indiana?


Contact your state representatives to ask for their support to include a Pro-ESOP statement in the party platforms and to consider Pro-ESOP legislation that would encourage the conversion of business to ESOPs.  Use this link to enter your address to identify who your representatives are.

Indiana State Representatives

Indiana State Representatives

How many ESOPs are in each State Representative's District? You may use our Lookup Table to enter in the Indiana Representative District (1-100) and the table will return the ESOPs within the district and the Indiana State Representative's name.

Indiana State Senators

Indiana State Senators

How many ESOPs are in each State Senator's District? You may use our Lookup Table to enter in the Indiana Senate District (1-50) and the table will return the ESOPs within the district and the Indiana State Senator's name.

Address: 2760 Fortune Cir Dr E # 421983, Indianapolis, IN 46242-1983

Phone: (317) 561-1242

Email: info@inceo.org

Contact the INCEO

For more information on employee ownership in Indiana please email us