Political Quotes

“I would like to support the pension improvements in this legislation, and I want to talk briefly about three issues. First of all, payroll taxes on stock options: for over 30 years, since 1971, the IRS has taken the position that employee purchases of company stock and stock options do not give rise to employment tax obligations. Now the IRS is totally reversing its position, and employees I am sure will consider this a tax increase. What this bill does is to preserve that 30-year policy which we have been operating under for so many years. In addition to higher taxes, several adverse consequences, I feel, are likely to flow from the failure to address the problem. First of all, employee stock purchases will be depressed, reversing the trend in recent years toward greater ownership. Also, because employment taxes are higher until an employee reaches the maximum Social Security wage base of approximately $85,000, the change will also tend to harm those earning below the maximum wage base more than those earning above it. For the same reason, it is going to become more expensive for companies to award stock options to the average worker because employers will bear half the burden of employment taxes. By enacting this legislation, we will preserve existing laws on the incentive stock options.”