At a campaign stop in New Hampshire on July 16, Democratic presidential candidate Hillary Clinton unveiled an economic plan to incentivize corporations to engage in profit-sharing with employees.
“It makes good business sense. This increases productivity, it increases loyalty to employees, it gives you a bond with employees,” Clinton told the crowd on Thursday afternoon.
The proposal, titled “Rising Incomes, Sharing Profits," proposes a two-year tax credit that would equal up to 15 percent of annual profits given to employees at lower and mid-level ranks of a company, The New York Times reported. The tax credit would be capped at 10 percent of total employee wages at a company to prevent large companies from collecting excessively large tax breaks.
According to the Clinton camp, who provided more specific details shortly after Clinton’s initial announcement, the proposal would cost between $10 to $20 billion over a 10 year period and would be paid for by closing corporate tax loopholes.
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“We need to get businesses back looking after their employees and their customers and their country, not just their executives and their shareholders,” Clinton stated.
In the past, Clinton has dismissed what she calls “quarterly capitalism,” where companies focus solely on short-term results and ignore the long-term well-being of employees. Clinton’s plan aims to provide workers the incentive to stay at their place of employment for a longer period of time knowing they will see pay increases.
Clinton campaign advisor Alan Blinder, a former Federal Reserve vice chairman, told CNN he believed that Clinton’s agenda “would lead to more dollars in the pockets of workers across the country."
“When companies share profits, not only do workers benefit but the companies themselves see higher productivity and make a stronger contribution to our economy,” he said. “It’s a win-win, and I’m glad Hillary is making this issue a priority.”
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Clinton’s plan likely has political motivations, as well. Her primary opponent, Independent Sen. Bernie Sanders of Vermont, has become an advocate of liberal economic policies, such as greater government oversight on large banks.