Here's how Joe Biden's tax plan could spur a surge in employee-owned businesses:
The tax plan to fund President Joe Biden’s $6 trillion proposed budget contains a number of new revenue-raising measures, most imposed on the highest-earning Americans and corporations. One of the tax hikes, a proposed 17% increase to the top capital gains tax rate, could have an unexpected side effect: A major uptick in employee-owned businesses.
“What really pushes most owners over to ESOP sales is legacy. They’re invested in the company being rooted in the community,” says Loren Rodgers, the executive director at the Oakland, CA-based National Center for Employee Ownership. “But, if we take as a given that Biden’s tax ideas get put into place, it would definitely be a pretty major shift in the incentive to create ESOPs.”
Ashleigh was inspired to set up an ESOP after hearing the head of Pennsylvania’s Center for Employee Ownership speak at an event. After talking it through with Andrew, the two worked with TriState Capital to transition into a S-corporation ESOP. The tax benefits were significant: S-corp ESOPs pay no federal or state income taxes, and the company was able to use the tax savings to fund their buyout.
ESOPs that are organized as S-corporations have a slightly less volatile orientation. They aren’t subject to the same capital gains exemption as sales to ESOP C-corps, and they’re not affected by the corporate income tax. If Biden’s proposed tax hike for those in the top income bracket passes, raising the rate from 37% to 39.1%, you could see a slight decline in new S-corporation ESOPs.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Joe Biden Clarifies Comment Blaming Facebook Over Vaccine MisinformationJoe Biden clarified his comment about the spread of misinformation on social media platforms, drawing pushback from Facebook after the president seemed to suggest that it was “killing people&…
Read more »
Disney Unveils The Joe Biden Animatronic That's About To Bump The Robo-TrumpThe new Hall of Presidents will also feature one of Biden's signature accessories.
Read more »
2024 election: Trump forces Republican field to sidestep direct challenge to BidenMike Pence, Mike Pompeo and Kristi Noem appear at a conservative Christian summit in Des Moines on Friday. They are just a few of the potential 2024 Republican candidates courting Iowa voters.
Read more »
Tom Brady jokes with Biden at White House about Trump's false election claimsTom Brady joked about Donald Trump's baseless claims of voter fraud and his description of President Joe Biden as ‘Sleepy Joe’ as he joined the rest of his Tampa Bay Buccaneers at the White House
Read more »