It’s Election Day. If you haven’t voted, today you have an opportunity to prevent great harm to Nevada, its economy and its ability to attract new industry. And for thousands of Nevadans, the stakes are even higher. You might be among the many voting to save your job.
The most important race on your ballot is at the very end. It’s Question 3. And for Nevada to build on its slowly recovering economy, for its businesses to remain regionally competitive, Question 3 must fail.
No single race, no single potential outcome of today’s election is as important to Nevada’s future as the rejection of Question 3. Not the governor’s race. Not control of the Legislature. Not the title of U.S. Sen. Harry Reid, who is fighting to remain majority leader of Congress’ upper chamber.
If passed, Question 3 would impose a 2 percent margins tax on all Nevada businesses with at least $1 million in annual revenue. Contrary to the claims of the question’s proponents, the tax would slam small businesses as well as the state’s largest employers. Various studies predict the tax would take up to $800 million per year from the economy, money that businesses would have invested in expansion or equipment, employee pay raises, benefits or new hiring. Thousands of jobs will be wiped out, and some companies will be forced to close their doors for good.
Why might your job be at risk? Because Question 3 would impose a tax on business revenue, not profit, a flaw that ensures even money-losing companies are stuck with a sizable new tax liability. For high-volume, low-margin businesses — they exist in multiple sectors, from retail to health care — the tax will wipe out profitability altogether. A report from Jeremy Aguero of Applied Analysis found the margins tax would have the effect of a 15 percent state corporate income tax, almost double California’s punitive rate.
Nevada still has one of the country’s highest unemployment rates at 7.3 percent, and its U-6 unemployment rate, which includes the underemployed and people who have given up looking for work, is the country’s highest at 15.9 percent. A tax on business revenue will only make those numbers worse.
If you think you won’t pay this tax, guess again. It will hit your grocery store, your doctor’s office and hospital — Medicare and Medicaid revenues are not exempt — your utility bills and your gas station. You’ll pay more for everything.
And for what? A promise that all the tax will money will go to K-12 public schools, and a promise that all that money will make Nevada’s struggling schools better. Those are promises that Question 3 proponents can’t keep. The Legislature can shift existing tax revenues to bolster funding across state government. And with no accompanying education reforms or accountability measures, Question 3 will effectively reward the same dysfunctional education bureaucracies for their poor performance.
Are you willing to bet your job on Question 3? We aren’t either.
Do your homework before you vote. Review the Review-Journal’s endorsements at the link below. Review the newspaper’s voter guide at www.reviewjournal.com/voter-guide. Cast an informed vote.
If you do, there’s only one possible choice on Question 3. Vote no on Question 3.
ON THE WEB: For a complete list of the Review-Journal editorial board’s 2014 election endorsements, go to www.reviewjournal.com/endorsements.