AFL-CIO abandons margin tax

Chantal Lovell

It’s not often NPRI agrees with the AFL-CIO, but in the case of the economic problems that would come from the proposed margin tax, it seems everyone except the Nevada State Education Association understands the tax is terrible idea.

Today, the AFL-CIO — which once supported the tax and assisted the NSEA get the initiative on the ballot, voted overwhelmingly to oppose the measure that would result in lost jobs and an even weaker economy than we have now.

NPRI highlighted this reality just days prior to the vote in telling the story of a long-time Las Vegas construction company that could be forced to close and lay off its 70 employees if voters approve the margin tax in November.

AFL-CIO Executive Secretary Treasurer Danny Thompson was quoted in the Las Vegas Review-Journal as saying:

The vote today in opposition to the margins tax initiative is not a vote against education. It is a vote against a flawed initiative that will cost many of our members their jobs and raise the cost of living on Nevadans on a fixed income and on citizens that are still struggling to make ends meet after years of a terrible recession.

The full resolution, reportedly passed in a 229-78 vote, was published by Jon Ralston as follows:

Resolution # 3 (as amended, May1, 2012 in Committee)


Whereas:   we feel tax policy is best established through the Legislative Process where the effects and implementation can be discussed and the issues resolved; and

Whereas:  we understand the need for implementation of tax policy where the effects, the levels of revenues and the utilization of those revenues are clearly defined; and

Whereas:  the Education Initiative does not clearly address the effects on all businesses in the State of Nevada; and

Whereas:  the Supporters of the Education Initiative have themselves argued different applications of the tax on businesses in the State of Nevada; and

Whereas:  the provisions of the Education Initiative do not clearly define how it would be applied to the construction industry; and

Whereas:  Supporters of the Education Initiative have advertised the tax as a Net Profits margins tax when in fact it is a Gross Income tax;  and

Whereas:  many of the signatory contractors of the Building and Construction Trades Council have been operating on their reserves for the last several years as the State of Nevada tries to work its way out or poor economic times;  and

Whereas:  the Education Initiative does not take into consideration the losses those contractors have endured but instead burdens them with a tax based on the Gross Revenues from work they may perform; and

Whereas:  many contractors have gone out of business during these poor economic times and the Education Initiative may place a tax burden on the contractors and business which have been surviving on marginal returns forcing them out of business as the tax burden may be higher than the profit margin; may it therefore

Be Resolved:  that he Nevada State AFL-CIO and our affiliated Unions oppose the passage of tax policy while it is not clear what the effect on our signatory partners will be; and be it  

Further Resolved:  until the effects of the Education Initiative are clearly defined we oppose the passage and implementation of the measure, and that the Nevada State AFL-CIO will review and reevaluate its position relative to this measure at the 2014 Constitutional Convention.