Mark Cuban, whose net worth is reportedly more than $10 billion, has proposed a new way to tackle wealth inequality: companies that do not give employees equity should face higher corporate taxes. The Shark Tank star says workers should benefit when the businesses they help build become successful.
Mark Cuban has spent years speaking publicly about wealth inequality and ways to spread the financial gains created by successful companies. Now, the billionaire entrepreneur is proposing a stronger incentive for businesses: share equity with employees or pay higher taxes.
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The idea comes from Cuban’s own experience as an entrepreneur. He has previously given company stock and equity to employees, including at Broadcast.com, the media company he sold to Yahoo for $5.7 billion in 1999.Mark Cuban wants companies to share equity with employeesResponding to a question on X about how he would reduce wealth inequality in the U.S., Cuban suggested increasing taxes on companies that do not provide equity to their employees. His proposal was straightforward.
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“Increase the taxes of any company that doesn’t offer equity to every employee on a pro rata basis to non-founder executives. If they get rich from the market, so do they.”
ALSO READ: ‘Where to kill Barron Trump?’: After Melania Trump, Iran targets Trump’s 20-year-old son in chilling video as $10 million bounty claim emerges amid US-Iran tensionsCuban said the approach reflects what he has already done at companies he founded. “It’s exactly what I have done for employees in companies I have started. Most wealthy people get that way from selling their companies or taking them public.”
The entrepreneur has previously discussed how employees benefited from his decision to distribute stock.
330 Broadcast.com employees received stockCuban recently said on the What It Takes podcast that he awarded stock to 330 employees at Broadcast.com before Yahoo acquired the company in 1999. According to Cuban, 300 of those employees became millionaires as a result.
He has also said that employees at his first IT consulting company, MicroSolutions, received equity and cash bonuses. For Cuban, employee ownership is closely linked to the success of a company because workers have a direct financial interest in its growth.
Why Mark Cuban says higher taxes could workCuban’s proposal comes as wealth inequality remains a major economic issue in the US. One argument against higher corporate taxes is that businesses could potentially pass increased costs on to consumers through higher prices.
Cuban, however, pushed back against that argument on X. “Each entrepreneur decides what margins, gross or net, they are willing to accept. For competitive or any other reason.”
He also argued that paying taxes can ultimately benefit communities and businesses. “Some of us realize that even though we might not enjoy paying taxes, and know that maybe 40% of the taxes paid actually get to people who need it, that’s still a value for the community, which can help your business.”
Cuban says aligning employees and companies benefits everyoneCuban believes giving employees a stake in their companies can create stronger alignment between workers, executives and founders. “As far as equity: Every founder worth a damn knows that the greatest success, economic and personal, comes from aligning the goals and interests of as many stakeholders as possible.”
He concluded: “Everyone will benefit more, when everyone benefits more.”
Cuban also warned that growing income inequality could create wider social and economic tensions. “If we continue to see growing disparity in income, you risk unrest and further division, which is the most expensive tax on every business.”