The Ominous Nevada Margin Tax
On the Nevada ballot is an initiative proposed by the teacher’s union to raise funds for Nevada schools. Nevada has some of the worst schools in the country, so the initiative sounds good on the surface – who doesn’t want to help school kids?
However, if this tax is passed it will loot the producers in the state and make Nevada an even more unfriendly business climate than California. Many businesses are attracted to the state of Nevada because there is no state income tax and regulation is reasonable. If this initiative passes, not only will the state of Nevada fall off the radar for companies from other states looking to relocate, but many existing business will pack up and leave, taking jobs with them.
What makes the tax so ominous is it is calculated on gross profits, without taking into account net profits. Therefore, employers would have to pay the tax even if they are losing money. The only ones exempted are one-person businesses; the tax impacts not only big businesses, but thousand of small businesses who provide the bulk of the jobs in the state.
There is no guarantee that the money raised by the tax will go to the schools. What is guaranteed, and true impact of this ill-advised measure, is the devastation of the business environment in Nevada. If you thought Nevada suffered through a bad recession in the last five years, you haven’t seen anything yet if the Margin Tax initiative passes.