Tuesday, August 14, 2018
Andrew Stumpff Morrison (Michigan), Perpetual Motion Machines: ESOPS Don’t Pay for Themselves, 159 Tax Notes 1289 (May 28, 2018):
In this article, Stumpff addresses policy issues regarding employee stock ownership plans and demonstrates how some claims in support of ESOPS aren’t supported by the math.
The idea that ESOPs pay for themselves — that they provide additional employee value at no theoretical cost to anyone else, including the employees — is fully rebutted. If the demonstration above does not persuade a reader of that, experience should. Despite many decades of active and significant tax subsidy, ESOPs remain rare and have not taken over the business world. Why not, if they provide employees and shareholders something for nothing?