CATO fellow condemns Nevada margins tax

RENO — “The last thing we need is something that chokes off the start of new businesses.”

So said Gerald P. O’Driscoll Jr., a senior fellow of the CATO Institute, about the proposed business margins tax on the Nov. 4 statewide ballot.

He discussed the potential economic impact of the so-called Education Initiative at a Republican Men’s Club luncheon at the Atlantis.

CATO is a libertarian public policy think tank and research organization.

“Education cannot be improved by killing Nevada’s economy,” O’Driscoll said. “The path to a better education as is for all other government programs is a better economy, and the margins tax is not a path to a better economy.”

According to O’Driscoll, when the average deductions are taken out there is a 1.4 percent tax on gross revenues. He stated that for every $1 million a company makes in sales, that company would have to pay $14,000.

He added that margins tax proponents claimed that it’s just a tax on large businesses and that is not true it will affect both small and big businesses alike. O’Driscoll added that if the tax passes, voters will see who has been affected by this bill because they will be joining the ranks of the unemployed.

“That’s bull. He’s clearly unfamiliar with the proposal,” said Dan Hart, campaign manager for the Education Initiative. “The opponent’s own consultant admits that only 13 percent of the businesses in Nevada would be affected by it and those are the largest businesses in Nevada”

Hart said opponents of the proposed tax have been fast and loose with the truth for a long time and this is just one more instance of that occurring.

“It’s a tax on businesses that make more than $1 million; it doesn’t affect anyone but big businesses no matter how much they tell you differently,” he said. “Their campaign is a campaign of deception. They will do and say anything to avoid paying this tax, to avoid supporting the public schools like they do in virtually every other state.”

Question 3 on the ballot is arguably one of the most important issues for Nevada voters this year. The proposed tax, placed on the ballot by the Nevada State Education Association, would bring in as much as $750 million a year for Nevada’s public education system.

Contact Capital Bureau reporter Whip Villarreal at or 775-687-3901. Find him on Twitter: @WhipVillarreal.

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