Statement From ESCA On The Reaffirmation Of ESOPs In The 2016 Republican Party Platform
Washington, D.C. – In response to the Republican National Convention once again endorsing employee stock ownership plans (ESOPs), Employee-Owned S corporations of America (ESCA) released the following statement from President and Executive Director Stephanie Silverman:
“ESCA applauds the Republican Party for once again committing to the expansion of employee ownership for workers across the United States. Boosting employee ownership strengthens businesses, boosts retirement security, and helps keep jobs in America.
“The ESOP model is a tried and true way to ensure that workers can become capitalists and share in the rewards of a successful company. Nearly half a million employee-owners at S corporation ESOP (S ESOP) companies benefit from ESOPs in every major private-sector industry group. In fact, S ESOPs increased employment by 60 percent from 2001 to 2011, while the private sector as a whole had flat growth.
“Today, 120 Members of Congress, including 69 Republicans, have co-sponsored legislation that would bring employee ownership to more workers throughout the country. More employee ownership means more growth, enhanced retirement security, and reduced wealth and wage inequality.
“With a record number of business owners retiring in the next decade, incentivizing owners to turn their businesses over to employees could not be more timely. We are proud that the Republican Party recognizes the benefits of ESOPs and look forward to working with party leadership to encourage employee ownership.”
Details About The 2016 Republican Party Platform
Page eight of the 2016 Republican Party Platform declares:
“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.”
Details About Legislation
In the 114th Congress, Senators Pat Roberts (R-KS) and Ben Cardin (D-MD) along with Representatives Dave Reichert (R-WA) and Ron Kind (D-WI) introduced the Promotion and Expansion of Private Employee Ownership Act (S. 1212/H.R. 2096) to help more Americans gain retirement savings and security through private employee ownership. Specifically, the bill seeks to:
- Incentivize owners of S corporations to sell their stock to an ESOP;
- Provide needed technical assistance for companies that may be interested in forming an S ESOP;
- Ensure small businesses that become ESOPs retain their SBA certification;
- Encourage the flow of bank capital to ESOP-owned S corporations (house bill only); and
- Affirm the importance of preserving the S ESOP structure in the Internal Revenue Code.
View list of co-sponsors here.