Week in Review: The merits

Andy Matthews

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.

The merits

One of the most common observations NPRI’s supporters share with me goes something like this:

“You know, Andy, I hear a lot of people on the left criticize you guys when you come out with some new study or analysis. But I never hear any of them actually prove you wrong — or even bother to try.”

I must say, I’ve observed the same thing — and in a way, I get a kick out of it. Those who oppose our ideas always greet our work with accusations of bias or sinister motives, or with demands that we reveal who’s funding us. But they never seem interested in refuting the merits of what we’re saying. I’ll let you draw your own conclusions as to why that may be.

So why am I bringing this up? There’s a new study out this week touting the many supposed benefits if Nevada voters were to pass the margin tax, which will appear as Question 3 on this November’s ballot. The study’s most significant conclusions are that passing the measure would 1) improve the quality of our education system, and 2) strengthen the state economy through increased job creation.

The study was conducted by UNLV’s Center for Business & Economic Research and paid for by The Education Initiative. In case you’re wondering: Yes, the latter is the same group that is leading the charge to pass the new tax. So here we have the folks who are funding a ballot measure releasing a study finding that said ballot measure is a terrific idea. I’ll give you a moment to recover from your shock.

Now, it’s tempting to simply scoff at all this, and to dismiss it as both absurdly predictable and predictably absurd. But to reject a study’s conclusions based on the identity of its authors or funders would be exactly what I just got through scolding our critics for, wouldn’t it? More times than I can count, I’ve reacted to criticism of NPRI’s work by thinking: Either prove us wrong, or zip it. And so we need to hold ourselves to the same standard.

That’s why, in our press release on Wednesday reacting to the study, we made only brief mention of who wrote and paid for it, and then shifted to an analysis of the study’s substance. And indeed, there were many serious flaws for us to point out.

For example, the study’s authors appear to arrive at their job-growth numbers based heavily on the redirecting of corporate funds from capital investment toward labor-intensive government-spending programs. This line of thinking, however, runs counter to a very basic and widely recognized economic principle: that capital investment is the chief driver of both labor productivity and wages, and serves as the foundation of our economy. Nevada’s long-term economic health depends on the sustainment and growth of the state’s supply of capital. 

The study also, in championing the margin tax’s supposed benefits in the education realm, claims to rely upon a body of research finding a correlation between education spending and student achievement. As NPRI’s Geoff Lawrence noted, “The studies they cite, however, don’t actually make this comparison at all. They instead relate class size to achievement levels in the early grades — a body of research that is not in dispute.”

Last month, we at NPRI released our own analysis of the margin tax proposal, and you probably recall that our conclusions differed greatly from those in The Education Initiative’s study. That’s because our study was based on sound economic theory and a proper understanding of the effects of taxation on private enterprise — as well as an honest assessment of the relationship between education spending and results.

The same cannot be said of The Education Initiative’s analysis. Nevertheless, we welcome this new addition to the debate over the margin tax. It has given us a chance to once again discuss the proposal on the merits — something we at NPRI are never afraid to do.


A few of you asked me about my recent trip to Minnesota, which I referenced in last week’s column. I actually did quite a bit of traveling last week, visiting not only Minnesota but also North and South Dakota before spending a few days on the Oregon coast. I had originally planned to go to Oregon back in March, and solicited some of your recommendations on particular places to go, but I ended up having to cancel that trip. However, I was able to put a lot of your suggestions to good use when I finally made it there last week. So thanks again!

Anyway, after this recent jaunt, I’ve now been to 49 states — and next summer’s trip to No. 50, Alaska, is already planned. I’d be curious to hear from any one of who have managed to check all 50 off your list. Which state is your favorite? (Excluding Nevada, of course!)

As always, thanks for reading, and I’ll see you next time.

Andy Matthews
NPRI President

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