Posts Tagged ‘business profits tax’

Proposal Seeking A Texas-Style Business Margins Tax To Support Public Education To Be Filed Wednesday

By Sean Whaley | 1:19 pm June 5th, 2012

CARSON CITY – A proposal seeking to implement a Texas-style business margins tax in Nevada to support public education will be filed with the Secretary of State’s office on Wednesday.

Supported by the state teachers union and the AFL-CIO, if the groups can collect 72,352 signatures by November 13, the issue of taxes will be dumped squarely in the laps of state lawmakers in 2013.

Graphic from Free Software Foundation via Wikimedia Commons.

News that the groups were finally ready to file the initiative petition was first tweeted by Las Vegas Sun columnist Jon Ralston.

“Basically it is a 2 percent tax on a business entity’s taxable margin for that year,” said Lynn Warne, president of the Nevada State Education Association.

The threshold for paying the tax is a business making more than $1 million in gross revenue. This threshold is expected to protect small businesses from having to pay the tax, she said.

The proposed tax is expected to bring in about $800 million a year, Warne said.

If enough signatures are collected from Nevada registered voters by the deadline, the 2013 Legislature would have 40 days to approve the proposal or it would go to the voters in 2014. Lawmakers could also offer a competing tax proposal to appear on the ballot, but a two-thirds vote would be required to move any competing tax measure forward in the Legislature.

Warne said she does not foresee any difficulty in gathering the necessary signatures.

“We’re confident that we will not only collect the necessary signatures, which is 73,000, but we will collect significantly more than that and have those ready to be filed with the state by the beginning of November,” she said.

Gov. Brian Sandoval today reiterated his opposition to such a tax proposal. Sandoval earlier this year said he will extend a collection of taxes set to expire on June 30, 2013, into the new budget to ensure there are no further cuts to education.

Supporters of the margins tax say that move doesn’t go far enough, however.

“That’s fine; it’s not adequate though for funding schools and other essential services in the state,” Warne said. “You’ve seen the tremendous battles that have gone on in school districts with regards to funding and how to make ends meet. We just can’t continue to cut funds to education and expect the quality to improve.”

The proposal will provide consistent and predictable funds for education, eliminating the need for layoffs or program cuts, she said.

The association would also work to eliminating the current payroll-based business tax, called the Modified Business Tax, Warne said. But there would need to be a transition period so as not to create a hole in the budget, she said.

Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, said in a statement that a margins tax would be a “disaster” for Nevadans.

“Despite misleading rhetoric from the Left disparaging ‘corporate greed,’ all taxes are ultimately paid by individuals and families,” he said. “A business margin tax will only further squeeze struggling private firms, dampening their ability to hire and suppressing growth in wages. The pain will be felt by families across Nevada.”

Lawrence said economists from across the political spectrum consider a margins tax to be one of the most economically destructive tax instruments available.

“With Nevada’s adult unemployment at 12 percent and youth unemployment rate at 28.8 percent, a margins tax is a recipe for prolonged economic depression in the Silver State,” he said.

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Audio clips:

Lynn Warne says there will be no difficulty in collecting the needed signatures:

060512Warne111 :16 beginning of November.”

Warne says Gov. Sandoval’s plan to extend a package of sunsetting taxes into the next budget is inadequate:

060512Warne22 :20 quality to improve.”

Teachers Union President “Excited” That Business Profits Tax Ballot Proposal Moving Forward

By Sean Whaley | 1:56 pm April 9th, 2012

CARSON CITY – The president of the powerful state teachers union said today she is “excited” that another labor organization, the AFL-CIO, plans to pursue a business profits tax initiative petition.

“It will be a big deal,” said Lynn Warne, head of the Nevada State Education Association. “We’re excited that Danny (Thompson, executive secretary-treasurer of the Nevada State AFL-CIO) has decided to move forward with this. Anything we can do about funding our schools adequately in this state is great.”

Photo courtesy of the National Archives and Records Administration via Wikimedia Commons.

Warne did not say in an interview on the Nevada NewsMakers television program that the teachers’ union will be throwing its weight behind the petition drive, however.

Thompson said last week his group will push forward to collect the 72,352 signatures by  November 13 to take the tax proposal to the 2013 Legislature. Lawmakers will have 40 days to approve the proposal or it will go to the voters in 2014. Lawmakers could also offer a competing tax proposal to appear on the ballot, but a two-thirds vote would be required to move any tax measure forward in the Legislature.

Thompson said the proposed tax, which would be assessed on net business profits in excess of $500,000 at a rate of 2 percent, has been projected by some analysts to bring in about $1 billion a year to the state general fund. The money would go to fund public and higher education. The initiative petition has not yet been filed with the Secretary of State’s office.

In an interview with the Las Vegas Sun last week, Warne said the teachers union has not signed off on Thompson’s proposed tax petition because of concerns regarding the language. Warne said she supports in concept the effort by to raise money for schools.

The teachers union had indicated in January that it would sign on to the tax proposal.

In the NewsMakers interview, Warne said 2014 could be a major election year in Nevada with GOP Gov. Brian Sandoval up for re-election and a business profits tax measure on the ballot as well.

Sandoval has moved “a bit in the direction of needing to keep our education budgets whole,” she said. But Sandoval’s plan to continue a package of taxes set to sunset on June 30, 2013 into the next budget to avoid further cuts to education is inadequate, Warne said.

“We’re still at funding levels that are lower than the 2003 funding for the education budget, so no, it’s not enough and I think the governor would acknowledge that as well,” she said. “But it’s going to help.”

Warne said the two competing tax measures being pushed by Las Vegas businessman Monte Miller, one seeking to give the Legislature the authority to raise the mining tax and a second that would increase the gaming tax on the state’s largest casinos, are being pursued to confuse voters about the business tax proposal.

“Mining and gaming are the low hanging fruit in this state in terms of targets for tax increases,” she said. “And so Monte has picked those. There are a lot of questions as to his sincerity as to whether or not he would want to see those move forward. He has even made comments that should gaming try and strangle Danny’s effort then he will back off his gaming initiatives.”

Warne said the association has never had any discussions with Miller regarding his two petitions.

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Audio clips:

NSEA President Lynn Warne says the association is excited the AFL-CIO is moving forward with a business profits tax:

040912Warne1 :13 adequately is great.”

Warne says Sandoval’s plan to continue the sunsetting taxes isn’t enough but it will help:

040912Warne2 :18 going to help.”

Warne says there are questions as to whether Monte Miller is sincere about his tax petitions:

040912Warne3 :18 those move forward.”

State Labor Group Moving Forward With Business Profits Tax Ballot Measure

By Sean Whaley | 2:46 pm April 3rd, 2012

CARSON CITY – State AFL-CIO leader Danny Thompson said today his labor group is moving forward with a broad-based business profits tax ballot measure to raise money for education.

Thompson, interviewed on the Nevada NewsMakers television program, said the proposal will go forward as a petition to amend state law, which would first be considered by the Legislature in 2013. If the Legislature did not approve the measure within 40 days, it would go to the voters in 2014.

Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO.

Thompson said the tax, which would be assessed on net business profits in excess of $500,000 at a rate of 2 percent, has been projected by some analysts to bring in about $1 billion a year to the state general fund. The money would go to fund public and higher education.

Supporters of the proposal would have until November 13 to gather 72,352 signatures from registered voters, which Thompson said is more than enough time to ensure they would be successful. The measure has not yet been filed with the Secretary of State’s office because a final legal review is still under way, he said.

In a subsequent telephone interview, Thompson said there is no question that the proposal will be challenged in court so it is important to make sure it can withstand such a review.

“We qualified the minimum wage initiative in a period of a couple of months,” Thompson said. “And so we just want to make sure everything is correct. Because you still have to get over a court challenge, which inevitably we know will be coming.”

Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, said too many of Nevada’s students are failing in large part because of inadequate funding. A better educated workforce is needed to diversify the state’s economy as well, he said.

In anticipation of such a tax proposal, Las Vegas businessman Monte Miller has filed two ballot measures, one seeking to give the Legislature the authority to raise the mining tax, and a second that would increase the gaming tax on the state’s largest casinos.

He has called Thompson’s proposal, based on a Texas margin tax, “a destructive, terribly complex tax.”

Gov. Brian Sandoval has said he opposes the various ballot measures, arguing tax discussions belong at the Legislature. Partly in response to the different proposed ballot measures, Sandoval last month said he would extend a collection of taxes set to expire on June 30, 2013, into the next two-year budget to avoid any further cuts to public education.

Thompson said he has had no discussions with Miller about his business profits tax proposal, adding that Nevada has relied for far too long on gaming and mining to fund the state budget and public education.

Nevada will be the last state to recover from the recession because the state depends on discretionary income spent on the state’s gaming industry, Thompson said.

“I don’t know what it’s going to look like if we continue down the road we are going,” he said.

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Audio clips:

Danny Thompson says qualifying the ballot measure won’t be difficult:

040312Thompson1 :15 will be coming.”

Thompson says Nevada now taxes only gaming and mining:

040312Thompson2 :08 don’t pay taxes.”

Thompson says Nevada’s will recover last because of its tax structure:

040312Thompson3 :17 who recover last.”

Thompson says the tax structure needs to change:

040312Thompson4 :14 where we’re at.”