Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them.
Bring out your stories
As the old adage goes, “If you want less of something, tax it.”
Unfortunately for you, me and every business and employee in Nevada, the teachers union is seeking to reduce economic growth at one of the worst possible times — when tens of thousands of Nevadans are underemployed or unemployed and struggling to support their families.
The union’s latest effort is the margin-tax proposal, and if you’ve followed NPRI’s work over the last three years, you know the deceptively billed “Education Initiative” is nothing more than a thinly veiled attempt to exploit the children of Nevada to further pad the government’s bank account.
The margin tax would impose a 2 percent tax on every business bringing in more than $1 million in annual revenue. That’s less than $2,740 in sales — not profit — a day.
Nevada’s margin-tax proposal is modeled after the margin tax in Texas. After Texas imposed a margin tax in 2007, roughly 20 percent of small businesses reported that they had to lay off employees, and another one-third reported they left jobs unfilled because of the margin tax.
And 3 percent of small-business owners in Texas decided to close their doors completely as a result of their increased tax burden under the margin tax.
These aren’t just numbers; they represent the lives of tens of thousands of individuals who lost their jobs because of the margin tax.
And do you know what’s amazing?
The margin-tax rate in Texas is only 1 percent — and just half a percent for retailers.
Nevada’s tax would be two to four times as high!
So take the job-loss numbers you read above, and be prepared to multiple them by two or four times, to see what the likely impact would be if the margin tax passes here in Nevada.
Over the past few months, I’ve spoken to numerous people in the business community and plenty of others who are trying to get up to speed on this haphazardly drafted initiative. The consensus among them is that the margin tax would be a disaster for them personally, as well as for their competitors and the economy in general if it were to pass.
While numbers like those I’ve shared above are important — and we’ve produced plenty more in our extensive analysis on the margin tax — they aren’t enough.
We need to be able to share the stories, the lives and the faces those numbers represent.
Unfortunately, it’s not easy for a business owner to decide to share, publicly, how much the margin tax would hurt his or her business. Many of those I’ve talked with don’t want to scare their employees or their spouses.
I understand that.
But in order to fully inform the public about what this tax would do, NPRI needs to be able to share its human cost, too. Voters need to know about the mom-and-pop diner owners who will be put out of business, or the single mom who will be laid off.
So I’d like to ask you a favor. If you’re a business owner, would you be willing to let NPRI tell your story, and the story of what the tax would do to your business?
We’d respect whatever level of privacy or anonymity you felt you needed, and you’d be doing a great service to the state and helping to save your employees from the negative consequences of the margin tax.
Stories matter. Will you let us share yours?
Until next time,
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