The following article originally ran as the May 2014 President’s Page column in the ESOP Report. The ESOP Report is the newsletter of The ESOP Association. The full issue can be found on the Association’s website under Meet & Learn.
Obviously feeling good is not a bad thing. And with regard to The ESOP Association’s 37th Annual Conference attendees, especially those who visited members of Congress, overall reported “feeling good.” The “feeling good” feeling arises from the fact that the tax reform proposal put forward by the Chair of the House Ways and Means Committee Chair, Dave Camp (R-MI), did not denigrate specific ESOP tax benefits designed to encourage the creation and operation of ESOPs. The handouts provided to those traveling to the Hill had a big “we are appreciative” message for members of the House Ways and Means Committee, where tax law originates under the U.S. Constitution.
Probably the most positive report came from a group of attendees from Congressman Richard Neal’s district, the 1st district of Massachusetts. In a brief upbeat meeting, it was reported that Congressman Neal (D-MA) noted that visits from ESOP advocates were always pleasant, and enjoyable, as it was a mix of women and men that represented all pay grades at the companies. My personal comment to add is that while people working in ESOP companies have all the same characteristics of humans, in general, women and men of an ESOP company tend to be enthusiastic, and passionate, about being “owners” of stock of a free enterprise operation — a for-profit, American company. And candidly, nearly all politicians, and members of Congress are successful politicians, whether left or right, have the ability to read the mood of those they visit with. In other words, they can sense negativism, gloom and doom words, body language, and general not so happy feelings, just as they can positive and upbeat attitudes.
(To add a personal, longtime experience, it takes all my fingers and toes, and there are still not enough, to count the number of members of Congress who have said to me, “ESOP companies are special.”)
Can the happy story end here? No, because becoming “fat and happy” is the worst thing that could happen to our ESOP community. Setting aside the fretting, that is real, over the Department of Labor’s tough attitude towards ESOPs, and the fact that the Supreme Court may soon drop a real bomb on ESOPs, the bottom line is, as former Senator John Breaux said once on the Senate floor, “There are no final victories in the legislative process.” For example, backers of the seemingly sacrosanct tax laws permitting a tax deduction for interest on home mortgages, donations to charities and churches, for paying state and local taxes, among other sacred cows in the Federal tax code, were more than shocked to read Chair Camp’s tax reform proposal.
Bottom line, ESOP tax benefits are not carved in stone; they are not sacred. Today’s feeling good can turn out to be the enemy of the work that needs to continue — the exposure of what being employee owners means to the men and women who work in ESOP companies.
As noted in the March ESOP Report President’s Page column, don’t stop now.