[Congressional Record Volume 162, Number 26 (Friday, February 12, 2016)]
[Extensions of Remarks]
[Page E178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INTRODUCTION OF LEGISLATION TO EXPAND EMPLOYEE OWNERSHIP

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                         HON. DANA ROHRABACHER

                             of california

                    in the house of representatives

                       Friday, February 12, 2016

  Mr. ROHRABACHER. Mr. Speaker, today Congressman Collin Peterson and I 
introduced legislation that will expand employee ownership throughout 
America. This legislation is a bold proposal that, if enacted, will put 
management and labor on the same side, thus fostering cooperation 
rather than conflict.
  President Jefferson recognized ownership of private property as the 
keystone of a free society. Only a few decades after Jefferson's 
presidency, Abraham Lincoln pushed for, and Congress delivered, the 
Homestead Act of 1862, which has proven to be one of the most important 
manifestations of Jefferson's vision for broad-based ownership of 
property. More recently, President Reagan supported employee stock 
ownership, labeling it ``the next logical step . . . a path that 
benefits a free people.''
  The belief that all citizens should be able to acquire property and 
wealth made our country the envy of the world. This legislation is 
consistent with the vision of our founding fathers because it empowers 
employees--not just a select few at the top of the management 
structure--to share in the development, success, and profits of a 
company. Our proposal would enhance accountability, productivity, and 
prosperity by making sure all employees--both inside and outside of 
management--keep an eye toward the long-term interests of their 
company.
  Our proposal would provide certain tax benefits to employees who are 
recipients of a broad distribution of voting company stock, so long as 
that stock is held for a specified amount of time. Specifically, when 
an employer makes an across-the-board distribution of voting stock, the 
value of the grant would not be counted as an employee's taxable 
income, provided that the same number of shares is granted to every 
employee and the stock is held for five years. If held for ten years, 
employee stockholders can begin to sell or exchange a portion of their 
stock for other similarly-priced stock free of capital gains. Thus, 
after 20 years, the stock would be totally tax free.
  The provisions of this bill are carefully crafted to allow for the 
empowerment of employees and the diversification of an employee's 
portfolio. The phase-in of the capital-gains-free treatment is meant to 
ensure that the company stock will not simply be dumped all at once.
  One of the most important aspects of my bill is that it would, unlike 
traditional ESOPs, allow employees to directly own the stock granted to 
them, including all voting rights granted to any other normal 
stockholder. This would empower employees to exercise oversight of 
their managers in an enlightened and responsible manner, and create a 
spirit of corporate unity rather than the adversarial labor-versus-
management environment that is all too pervasive in corporate America 
today. It also gives the American working people the chance to benefit 
not just from physical and mental labor, but to profit from capital--
from corporate income, as well as their own time and energy.
  I ask my colleagues to join me in support of this legislation and let 
us lead the way forward to prosperity for millions of Americans in the 
years to come.

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