Democratic presidential aspirant Hillary Clinton has rolled out a plan designed to encourage more businesses to adopt profit-sharing plans.
Under Clinton’s “Rising Incomes, Sharing Profits” proposal, companies would get a 15% tax credit on profit-sharing contributions, capped at 10% of employees’ wages.
That would mean, according to the Clinton campaign that an employee earning $50,000 per year could receive $5,000 in shared profits, and the employer would then receive a $750 tax credit for that worker.
The Wall Street Journal, citing the Clinton campaign, said that small firms would be eligible for a larger credit, while the overall credit would be capped, to prevent very large firms from claiming “excessive” amounts, though how – and to what size firms such limits would be applied — were not specified.
The credit — designed to help firms offset the costs of establishing the program — would only be available for two years, though it would be available to all eligible firms offering profit-sharing, not just new programs. The campaign fact sheet explains that “After two years, companies that have established profit sharing plans and enjoyed the benefits of them would no longer need the credit to sustain the plans.”
The campaign estimated the credit would cost the government “roughly $20 billion over the -year budget window,” and would be “fully paid for through the closure of tax loopholes that she will identify as part of the comprehensive agenda that Clinton will introduce in the weeks and months ahead.”