Broadening Employee Ownership Transnationally

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

Dear BEOT members

This group as six objectives as set out at http://cog.kent.edu/grptran.html

I believe three of these objective, items 1, 5, & 6 could be furthered by a
program of providing tax incentives to domestic and international
corporations to attract their investment on a basis that more ownership
reverted to local citizens.  Specifically those citizens who were employed
by, or were key stakeholders on who the business depended for its existence
and profitability.

Tax advantages would be provided through introducing a cashflow tax system
on condition that when investments were written off for tax the ownership
would also be written off by it being transferred to the employees and
other citizens employed by or acting as suppliers, customers and members of
the host community.

In this way host countries could attract more foreign investment on the
basis that they obtained more local ownership and control .  But this would
be achieve on a very localised basis with those people most closely
connected to the business and are in a postion to improve its operations.
By localising the ownership and control in this way, universal ownership
would be introduced of the means of production.  The program would not
discriminate between local or foreign firms.  For this reason the program
should be attractive to the World Trade Organization (WTO). It would allow
increased globalisation to also increase localisation. A win-win result is
obtained at all levels.

The program would over time be at least revenue neutral for host
governments as the tax incentive only changes the timing of the tax
advantages for investors.  If individuals were taxed at a higher rate than
corporations in a host country then over time host governments would raise
more revenue as the tax based transferred from corporations to citizens.

A worked example of how the program can provide a win-win outcome for
investors, stakeholders and the host government is set out in point 3 of my
posting to the Economics of Ownership group http://cog.kent.edu/grpeog.html
on October 31st. Refer to: http://cog.kent.edu/archives/ownership/msg00059.html

Would other members of the group support this proposal as a policy item to
be adopted by COG?

We could then determine by what means the proposal could be put forward to
the WTO, and the other targeted organizations mentioned in objective 5 of
the group, namely "(5) consider avenues to put employee and other forms of
broader ownership into the mainstream of international development efforts
through UN agencies such as the UNDP and the ILO, and through international
finance agencies such as the World Bank".

Regards





Shann Turnbull
P.O. Box 266 Woollahra, Sydney, Australia, 1350
Phone: 02 9328 7466 office; 02 9327 8487 home
Fax: 02 9327 1497 home & office.  Mobile 0418 222 378
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Life long E-mail: sturnbull@mba1963.hbs.edu
http://www.mpx.com.au/~sturnbull/index.html