There are ways around that. Cooperatives can raise cash through subordinated capital campaigns (essentially an investor-backed loan at a capped rate of return)

There are ways around that. Cooperatives can raise cash through subordinated capital campaigns (essentially an investor-backed loan at a capped rate of return) and other methods. Even capital-intensive industries like manufacturing have big, successful worker cooperatives operating in them. Honestly, too many people make too big a deal out of the inability for cooperatives to trade ownership for cash. And yet bootstrapping a start-up is somehow still possible, acceptable, and laudable. And I won't even get into all the perverse incentives introduced by stock ownership and the secondary market. The tax issue, though, is the deal killer. Being double taxed by the federal government on your income is a non-starter. Until worker cooperatives get treated the same as producer and consumer cooperatives, I can't see them taking off in the US.