The hits just keep on coming. Hits to the proposed 2 percent margin tax on November’s ballot, that is.
While studies have shown the tax, if passed, would make Nevada’s effective corporate tax rate nearly double California’s, now comes a study that says the tax could cost the state nearly 9,000 private sector jobs.
The analysis by economist Jeremy Aguero of Applied Analysis, a Las Vegas-based researcher for the Coalition to Defeat the Margin Tax Initiative, concluded that sucking $700 million in taxes from the private sector would translate into nearly 9,000 private jobs lost and cut the state’s private payroll by more than $400 million a year.
Of course, 9,000 jobs is hardly a ripple, since Nevada already has 120,000 unemployed, not counting those who have given up looking for work. But if it is your job lost, it is significant to you.
The Education Initiative will be Question No. 3 on the November statewide ballot. It calls for a 2 percent tax on all Nevada businesses that gross more than $1 million a year. Its sponsor, the Nevada State Education Association, has claimed it would raise $800 million a year for K-12 education. Proceeds from the tax would be placed in the distributive school account, but there is no language in the ballot measure prohibiting lawmakers from extracting a like amount or more from the account and spending it on other things.
Aguero did note in his study that the loss of private jobs could be offset by public jobs, if the tax money is used to hire additional teachers and staff.
However, his report says “there are plausible scenarios where margin tax funds are not used to hire more teachers, but rather, are used to increase wages and salaries for existing teachers, administrators and support staff; to extend retirement or health care benefits to state workers; or to pay down the state’s unfunded pension and post-retirement health care liabilities.”
In addition to killing current jobs, Aguero said the tax would chill economic growth and prevent the creation of future jobs. These are further reasons voters should reject this benighted tax. — TM