Union bosses: Modified Business Tax hurts the economy

Victor Joecks

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. Just enter your email in the box on the top right.

For today’s week-in-review email, Andy writes a great column noting that even union bosses are now admitting that the Modified Business Tax hurts the economy.

There are few things sweeter in life than being told, “You’re right.” But when those words come, even indirectly, from the most unlikely of sources, it’s even better.

For years, we at the Nevada Policy Research Institute have noted that Nevada’s modified business tax (MBT), which is a payroll tax, hinders economic growth, because it is a disincentive to hire employees. The Legislature’s decision to raise taxes by doubling the MBT during the 2009 and 2011 sessions is one significant factor in Nevada’s current 11.6 percent unemployment rate.

You know this. Many elected officials know this. But you know who else acknowledges that the MBT hurts the economy?

Lynn Warne, president of the Nevada State Education Association, and Danny Thompson, executive secretary treasurer of Nevada’s AFL-CIO.

Yes, the heads of two of the most liberal organizations in the state. Don’t believe me? In their own words, here is what they said recently about the modified business tax.

As reported by the Las Vegas Sun, Warne said she thinks the MBT “hurts businesses’ ability to hire.”

Last week on The Agenda television program (at the 3:56 mark), Thompson made this statement.

The modified business tax was a poorly written tax. It’s probably the most regressive thing that we have that stifles economic development. … You pay taxes based on an employee, so there’s a disincentive to hire employees, because then I have to pay a tax. Whether or not I make money, it doesn’t enter into the equation.

These union bosses are echoing NPRI talking points.

Now, our stance hasn’t always been popular with the big-government crowd, but that doesn’t change the fact that NPRI’s position on this issue was and is right. We spoke the truth, stood firm and, a few years later, even some of the staunchest liberals in the state have agreed with our position.

This is a powerful vindication, not just for NPRI, but also for you and our thousands of supporters throughout the state. Our shared principles of individual liberty, free enterprise and limited, accountable government have, once again, emerged victorious in the battle of ideas.

So I hope you’re encouraged – but not passive. While Warne and Thompson have acknowledged the destructive impacts of the MBT, they want to replace it with a tax that’s much larger and even worse – the margins tax.

NPRI has done extensive work on the many problems with the margins tax, and we’ll be releasing even more in the next couple of weeks.

So when some members of the elite media, special-interest lobbyists or even just your liberal friends try to berate you into supporting the destructive and distortive margins tax, remember how our principles and analysis have been justified.

If we stand our ground and give them a few years, even liberals will recognize that we’re right on this issue, too.

Thanks for reading, and I’ll see you next time.

Andy Matthews
NPRI President

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