Re[4]: Employee ownership "dream"

["Thomas Brandt" <tbrandt@dbedt.hawaii.gov>]

I see a potential problem.  The top corporate income tax rate in the State of
Hawaii is only about 6 or 7% (and the local big business lobby is still
clamoring for a tax cut because hawaii is considered a "tax hell" compared to
other U.S. states).  So how would this work here?

____________________Reply Separator____________________
Subject:    Re[3]: Employee ownership "dream"     
Author: Shann Turnbull <sturnbull@mba1963.hbs.edu>
Date:       9/16/99 3:01 PM

I have some worked examples in my book, "Democratising The Wealth of
Nations" and in my much more current article 'Stakeholder Governance: A
cybernetic and property rights analysis', Corporate Governance: An
International Review, Blackwell, 5:1. pp. 11-23, January, 1997.
http://papers.ssrn.com/sol3/paper.taf?ABSTRACT_ID=11355

As a rule of thumb, a 50% reduction in a corporate tax rate of around 45%
should become irresistable.  However, many companies use tax minimising
schemes so other approaches may also need to be considered like:

1. Unless a company pays at least say 40% tax on his increase in net worth
or profit each year (which ever is the higher) then at least 5% of the
ownership is transferred to a stakeholders trust.  That is either a cash or
ownership tax is required each year.

2. Deductions for writing off any fixed assets depends upon ownership
transfer at the same rate.

Shann


At 05:51 PM 15/9/1999 -1000, Thomas Brandt wrote:
>I understand how OTC tax incentives theoretically could, unlike ESOP 
>incentives,
>be "revenue positive"--or at least relatively more quickly than ESOP
>incentives--even at the subnational government level (assuming the 
>government in
>question assesses both corporate and individual income taxes).  But I'm still
>left to wonder how much the incentives would have to be worth at the 
>subnational
>level to make all or most companies take advantage of them.  What do you
think?
>

Shann Turnbull
P.O. Box 266 Woollahra, Sydney, Australia, 1350
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