Hey, Nevada organized labor. What’s up?
I’m just writing to ask if you’re really sure about waiting until well into next year to decide whether you’re going to support The Education Initiative, the 2 percent margins tax proposed by the state teachers union.
It’s up to you, of course. You have to do what’s right for you and your members. But let’s just make sure you understand the implications.
First, this is undeniably the first real chance of getting a long-overdue business tax on the books since at least 2003, when the Nevada Legislature couldn’t muster the votes for a gross receipts tax. If this tax fails, it will be a long time before the state gets another shot. That’s especially true since the Nevada Legislature seems institutionally incapable of seriously addressing tax policy.
A prominent lobbyist once told me the only way a business tax would ever become law in Nevada was by initiative. After the teachers union gained ground on the margins tax, however, that same lobbyist decried the idea of creating tax policy at the ballot box.
Second, one of your own leaders — AFL-CIO Executive Secretary Treasurer Danny Thompson — made the case for a business tax at the end of the 2011 Legislature. Thompson noted the state’s poor graduation rates and poor test scores, and concluded that fixing schools was the key to future job growth. And key to that goal is additional money for schools. He was right then, and he’s right now.
But now the AFL-CIO is currently neutral on the tax idea, saying it will decide in April whether to support it or not. You guys must know that every day that slips by is one fewer day to organize and campaign.
Third, it’s good for the candidates you usually support. Without a strong Democrat at the top of the ticket, spending on this initiative will drive 2014 turnout among progressive Democratic education supporters.
I realize some of your members are concerned about claims from business leaders that this tax will cost jobs, and that’s something nobody wants. But aren’t these the same folks who tell your members that they don’t need a union to get good pay and benefits? Aren’t they the ones who told you putting a state minimum wage in the constitution was a bad idea? You didn’t believe them then; why take their word now?
Remember, every state that surrounds Nevada has business taxes, and they all have lower unemployment rates than we do. If business taxes alone led to unemployment, California would be suffering and we’d be booming.
And don’t listen to the folks who say a business tax will be paid by consumers, either. Two studies conducted years apart showed prices in business-tax states are about even with Nevada. We’re certainly not getting our no-tax discount at Target or Wal-Mart. And I’m fairly certain those big-box giants won’t flee Nevada if we impose the margins tax.
In fact, most small businesses will be exempt. The tax doesn’t apply to the first $1 million in revenue, and not until after deductions for the cost of goods and services or the costs of labor.
Finally, you’ve got to remember that the business community has opposed every revenue tax idea, whether it’s a net profits tax, a gross receipts tax or a margins tax. That’s why the teachers had to circulate an initiative instead of going through the Legislature.
So, what’s the holdup, organized labor? I know you agree education is the only real economic development program that will ever work for Nevada. I know you realize our schools aren’t adequately funded. I know you want your children to have more opportunities and a brighter future.
This tax — while certainly not perfect — is our best chance in a long while for us to broaden our tax base, improve our schools and offer would-be employers a more highly educated, better-trained workforce. In fact, it may be our last chance for a long time.
So, what do you say, labor? Want to give this idea another look?
Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at (702) 387-5276 or firstname.lastname@example.org.