EDITORIAL: Diverse opposition shows Question 3 is a bad bet

To decide how to vote on Question 3, you don’t need to hear any of the many arguments for and against its passage. You just need to see which groups are for and against its passage.

The Question 3 campaign is the most aggressive and important of the year. If passed, it would impose a 2 percent margin tax on all businesses that make more than $1 million in annual revenue. Studies estimate that the tax would take $800 million per year from the private sector.

The arguments for rejection of Question 3 are rooted in the economic damage it would cause: lost private-sector jobs, struggling businesses forced to close, the creation of one of the country’s least-friendly business environments. The arguments for passage of Question 3 are based on where the new tax money is supposed to be spent: on the state’s K-12 education system. Proponents of Question 3 say dramatically more education spending will lead to dramatically better achievement in Nevada’s struggling schools.

There is a partisan ring to these points. Republicans tend to favor lower taxation and a friendly business climate. Democrats tend to favor higher taxation and more government, and are more hostile to business. So it would be reasonable to expect a partisan divide on Question 3, with special interests breaking for and against the tax on predictable lines.

But that hasn’t happened. Instead, virtually every voice, every group, every business and every union is united in opposition to Question 3.

The camp in favor of Question 3 is so small that it can fit in a two-person tent: the state’s teacher unions and a handful of elected Democrats. That’s it.

The teacher unions support Question 3 because they put it on the ballot. They collected signatures from enough registered voters to bring it to a vote. It wasn’t a tough sell: Putting more money into public schools sounded like a can’t-lose proposition.

But Nevadans have had about two years to study the language of the initiative, and the more we learn about the question, the more reasons we have to reject it.

There’s no guarantee margins tax revenue will flow to public schools. The tax would be levied on money-losing businesses. The tax’s $1 million threshold is not an exemption, but a cliff that creates a disincentive for small-business growth; collecting even $1 over $1 million in a single year subjects all revenue to the tax. The tax hits multiple levels of commerce through “pyramiding,” which will significantly boost costs in industries with contractors and subcontractors, such as construction and health care. And on and on.

Attacking the messenger can be effective in marginalizing a particular policy. Supporters of Question 3 love to attack this newspaper and “big business” as anti-education and anti-union. But would they hurl the same label at the Las Vegas Sun and the Reno Gazette-Journal? Those newspapers endorsed a no vote on Question 3 as well.

If you thought you’d never see the Las Vegas Metro Chamber of Commerce, the Nevada Retail Association, the AFL-CIO and the Culinary union agree on something, that day has arrived. All of them have endorsed a no vote on Question 3, too. They understand that Question 3 would cause great economic harm. The opposition of the Culinary union is especially telling, because the children of a great many of their middle-class members are stuck in underperforming schools. The Culinary understands that increased school spending won’t help its members’ children if their members lose their jobs.

So, can the Review-Journal, the Sun, the Gazette-Journal, the state’s various chambers of commerce, the Nevada Retail Association, the Nevada Manufacturers Association, the Nevada Resort Association, the Nevada Hospital Association, the AFL-CIO and the Culinary all be wrong? And can the state’s teachers unions, standing alone just as they have in fighting education reform, accountability and school choice, be right?

Vote no on Question 3.