Banker says margins tax unfairly punishes businesses

In a small banquet hall Wednesday afternoon, John Guedry, president and chief operating officer of Bank of Nevada, asked a group of real estate managers whether they were aware of the Education Initiative, the title of Question 3 on the Nov. 4 ballot.

One woman, among about 75 members of the Institute of Real Estate Management gathered at Panevino, raised her hand.

Guedry’s speech marked the first of what he expected to be many talks with business leaders across the valley through November about a proposed 2 percent margins tax on business that would be earmarked for education.

Guedry believes the tax is flawed and unfairly punishes Nevada businesses.

“One of the fundamental flaws of this plan is that there’s no guarantee that one dollar of that will increase funding in K through 12,” he told the crowd, as he outlined the tax. “Is this really an education initiative, or is this just a new tax?”

The tax, backed by the Nevada State Education Association, would apply to the revenue of any Nevada business that makes more than $1 million a year. Supporters have said it would be levied on about 13 percent of companies in the state.

As the decision nears for voters, supporters are pounding the pavement, too.

Although proponents have yet to launch mass advertising, campaigning is in the works, according to Dan Hart, a political consultant at the Education Initiative PAC. Parents and teachers are becoming more and more familiar with the tax, and supporters are going door-to-door to inform people about why they think it’s necessary.

Guedry told the real estate group that the tax could trickle down to all Nevadans, as companies might have to cut payroll and staff.

“At a time when our economy is very fragile and we’re trying to grow jobs, this is a job killer,” he said.

Guedry said the margins tax could raise as much as $750 million a year, citing a report from Applied Analysis, a local company that studied the tax. The teachers union puts the figure closer to $400 million.

Though he spoke on behalf of the Las Vegas Metro Chamber of Commerce and the Nevada Bankers Association, Guedry said the chamber had yet to discuss its official position on the margins tax.

But he told Wednesday’s crowd that the margins tax could equate to at least a 15 percent corporate income tax on most businesses.

Hart disputed the notion that all Nevadans would be affected by the tax and the projections from those who want to vote the tax down.

“Our opponents have chosen to try and mislead people consistently on this issue,” Hart said. “It’s a shell game. It’s the usual bait-and-switch scare tactics these big corporations and banks are using.

“They’re trying to delude people. They’re using underhanded tactics because they know they can’t argue the facts. They will do and say anything not to pay taxes.”

Contact David Ferrara at dferrara@reviewjournal.com or 702-387-5290. Follow @randompoker on Twitter.