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Creates a new tax incentive for large U.S.-domiciled corporations that adopt qualifying employee equity distribution plans ("SHARE plans"). Eligible corporations get a 3 percentage-point reduction in their corporate income tax rate (subject to a cap tied to the market value of shares issued), and employees who receive stock under SHARE plans can exclude that stock from their gross income. The law sets detailed eligibility and plan rules: firms must average at least 500 full-time U.S. employees, grant periodic stock (no cash) to the lowest-compensated 80% of eligible employees (full-time U.S. employees with cash pay below $250,000, indexed after 2025), provide equal per-employee distributions (with limited grouping by tenure), and use vesting terms no longer than five years. Treasury/IRS must publish identified corporations annually and may issue aggregation and valuation rules; private-company stock must have valid market valuation and employee liquidity opportunities. The tax rate reduction applies to taxable years starting more than one year after enactment; the employee income exclusion applies to stock received after enactment.
The bill incentivizes broader employee ownership and makes equity compensation more attractive through tax benefits, but does so at the cost of reduced federal revenue, potential concentration of benefits and risks among certain firms and workers, and diminished state/local regulatory flexibility.
Full-time U.S. employees paid under ~$250k (especially the lowest‑paid 80% of eligible payroll) will receive periodic equal-value employer common-stock grants that vest within five years and can be sold after vesting, and those shares generally aren't taxed as income on receipt — increasing employee ownership and after-tax compensation.
Qualifying corporations receive a 3 percentage‑point lower federal corporate income tax rate and may deduct share distributions at fair market value, lowering corporate tax liabilities and making equity-based compensation more attractive.
Employees of privately held qualifying firms gain required market valuation and liquidation opportunities so they can realize the value of their employer stock.
Taxpayers and the federal budget face reduced revenue because of the corporate rate cut and the tax deferral/absence of income tax on receipt of employer shares, increasing pressure on deficits or requiring spending cuts or other tax increases.
Many of the benefits are likely to accrue to larger or equity‑heavy firms and to employees who already receive stock, concentrating advantages and potentially widening wealth inequality.
Employees who receive more of their pay in employer stock may face greater concentration of financial risk (less diversification) because compensation shifts toward equity that has no immediate income tax recognition.
Introduced July 23, 2025 by Thomas Suozzi · Last progress July 23, 2025