New Players in Employee Ownership Political Landscape

The election has brought in a very different set of key players to the employee ownership political process. President Bush is not on record on the issue, but strongly favors changes in the Alternative Minimum Tax, is likely to favor increased limits for defined contribution plans, and generally will be favorable to tax initiatives supported by the business community. The President's own tax cut proposals, however, could limit the amount of money available for some of the more ambitious proposals for changing limits on defined contribution plans.

In Congress, the new Ways and Means Committee chair is William Thomas (R-CA); his Senate Finance Committee counterpart is Charles Grassley (R-IA). Grassley has been favorable to ESOP legislation in the past; Thomas has no significant record on the employee ownership issue. In the Senate, the Democrats will have a partial-power sharing arrangement on the committees. Max Baucus (D-MT), a strong supporter of employee ownership in the past, will lead his colleagues on Finance. On the House side, John Boehner, whose "Wealth Through he Workplace Act" would have created a new kind of option deductible to the company but the spread on which would be taxable as capital gains to the employee, takes over as chair of the Education and the Workforce Committee. Overall, then the new lineup looks promising for employee ownership supporters.