Three reactions to Clinton's profit sharing plan

Dive Brief:

While the 2016 election is still far off, Democratic presidential candidate Hilary Clinton announced a 15% tax credit for any business that shares their profits with their employees as part of her tax restructuring plan.
Under the plan, firms that share profits with their employees will get a two-year tax credit equal to 15% of the amount they share, according to the fact sheet. The tax credit would be higher for small business, too, but it is not clear how the plan will define a small business. Eligible profit sharing would be capped at 10%.
Of course, not everyone believes this will ultimately solve the underlying problem.

Dive Insight:

HR guru Peter Cappelli, writing at Time's Money section, believes that while the plan may never see the light of day, it does set the stage for a discussion of two main voter concerns. One: people who aren’t at the top of the income distribution haven’t done very well in the years since 2001. The other: a growing awareness that while wages have stagnated, profits are up and business owners and investors are reaping all the reward, writes Cappelli.

Since the 1981 recession, employers have asked employees (especially unionized employees) to make sacrifices in down periods to help business, yet there didn’t seem to be any upside for employees when things improved, Cappelli writes. He notes that Clinton's plan may get senior management to consider profit sharing at all.

Bryce Covert at ThinkPress, on the other hand, claims Clinton's plan is driven by a corporate culture that fixates on short term over longer-term investments, particularly with employee compensation. American companies, Covert writes, are spending more of their profits on stock buybacks and dividends, which both serve to inflate their stock prices and hand more money back to their shareholders. Worker pay has stagnated and suffered for decades.

Then there is Robert Samuelson who, writing at the Washington Post, says that creating the tax break would pose huge practical problems and that the economic advantages of profit-sharing may be overstated. Whether this discussion continues into 2016 is yet to be assured, but HR managers would be wise to keep tabs on this topic.