The Realtors Against Question 3, related to the Alliance for Property Protection Rights, related to the National Association of Realtors, related to Nevada Data Mine LLC, would like for me to vote “no” on Nevada’s ballot Question 3. Oh hark! The fear mongering begins. Today’s mail includes my second mailer from their offices at 760 Margrave Drive, Reno, and it tells me:
“Thousands of Nevadans would lose their jobs. Employers would have to pay the tax on total revenue, even if they have no profits and are losing money.” Really?
Here’s the real Question 3: Shall the Nevada Revised Statutes be amended to create a 2% tax to be imposed on a margin of the gross revenue of entities doing business in Nevada whose total revenue for any taxable year exceeds $1 million, with the proceeds of the tax going to the State Distributive School Account to be apportioned among Nevada’s school districts and charter schools?
So, some firm doing more than $1 million worth of business in this state might be “profit-less, or losing money?” That isn’t a tax problem – it’s a lousy management issue. If the firm’s total revenue exceeds $1 million, and the taxable margin is determined by taking the lesser of (a) 70% of the entity’s total revenue; or (b) the entity’s total revenue minus the cost of goods sold or the amount of compensation paid to its owners and employees – then if a 2% margin tax would put the outfit out of business I think we could reasonably expect the enterprise is already doomed. But wait, the second item is pure doom and gloom:
“It would devastate future job growth in the state. This would be one of the largest tax increases in Nevada’s history, making us less competitive with neighboring states like California.” Devastate?
This is nothing more than the superannuated argument that lower taxes mean more economic growth. So, let’s look at our neighboring state. California was looking at a $60 billion budget deficit when the Housing Bubble/Wall Street Fiasco exploded, by using a combination of budget cuts and tax increases it had a budget surplus as of 2013. [USAT] In 2012 California’s GDP growth was 3.5%. As of 2013 it improved by another 2%. [BEA] Nevada’s rate YOY 2012-2013? 1.0%. Thus much for the anti-tax argument. And, while we’re at it – just once could some organization NOT employ the hyperbolic “Biggest Most Gigantic Extra Colossal Humongous Tax Increase Ever” ploy? That’s getting even more hirsute than the anti-tax argument.
“The Legislature would be able to divert funds to anything, not just education. It’s a blank check for politicians with no oversight or accountability.” Obviously, we DO need to put more money into our educational programs because these people can’t read.
What part of “with the proceeds of the tax going to the State Distributive School Account to be apportioned among Nevada’s school districts and charter schools” isn’t comprehensible? Granted the vocabulary is about at the 12th grade level, but this shouldn’t be an obstacle to people used to reading real estate contracts? But, there’s more:
“Increased costs would be passed on to your family. All of us would soon pay more for healthcare, food, clothing, gas, water, and housing.” Oh please!
All business expenses are passed along the economic food chain. They always have been. Imagine becoming worked up into a lather because the price of cocoa has increased to a three year high? Merciful Heavens, it’s up to $3,185 a ton. [WSJ] This cost will surely be passed along to candy bar consumers! Oh, the horror. However, how much more might we be paying if employees had to find private education, or private security, or private fire protection services, or pay for toll roads… Get the picture? At it’s core, the APPR argument says that any and all pass-along expenses are bad for us, without, of course, offering any substantiation for the assumption. It’s more logical to argue that the economic benefits of better public educational services are at least commensurate with any pass-along expenses we might incur as consumers. We do know from both statistical and experiential information that better schools = higher property values for homeowners; [DukeEdu] just as better police and fire protection contribute to the value of residential property.
And, this leads us to wonder – why are real estate interests so dead set against a business margin tax increase?