Hillary Clinton to propose 15% tax credit for profit sharing

Updated 3:00 PM EDT, Thu July 16, 2015
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(CNN) —  

Hillary Clinton will take her economic message on the road Thursday in New Hampshire, using her first town hall as a candidate to propose a 15% tax credit for any business that shares their profits with their employees.

Clinton will tell the audience here in Dover that her proposed tax credit will “encourage businesses to give employees a share in the record corporate profits these workers help produce,” according to a fact sheet provided by the campaign.

The proposal, called the “Rising Incomes, Sharing Profits” Tax Credits, is her first economic policy roll-out of the campaign and comes days after Clinton outlined her economic platform in New York.

The plan, according to campaign aides, said Thursday, would cost in the low tens of billions of dollars over a 10-year period, and would be paid for by closing tax loopholes that Clinton “will identify as part of the comprehensive agenda … in the weeks and months ahead.”

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%.

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“This would help firms overcome any initial costs of setting up a profit-sharing plan and encourage firms to try a strategy that has worked well for many workers and businesses,” the fact sheet said. “After two years, firms that have established profit-sharing plans and enjoyed the associated win-win benefits would no longer need the credit to sustain the plans.”

The plan would also not be available for high-income workers, according to the fact sheet, and “would only be available to firms that share profits widely among employees.”

Aides would not specify how Clinton’s plan would define small businesses or high-income earners.

They did say, though, that if a worker who earns $50,000 receives profit-sharing, the business could get a tax credit of up to $750 and the worker would be an extra $5,000 in shared profit.