Incentive to hire

Democratic state senators were onto something Tuesday when they proposed a tax incentive to spur hiring. They just didn’t take their idea far enough.

Majority Democrats suggested exempting the wages of newly hired workers from the state’s 1.17 percent modified business tax, or payroll tax, for one year. For the following two years, companies would get a 50 percent cut on the payroll tax bill. For an employee who is paid $50,000 annually, that’s a three-year tax break of almost $1,200.

The catch? The incentive only applies if the newly hired worker has been unemployed for at least six months. If a better applicant has been out of work only four months or, heaven forbid, already has a job, no tax break for you.

But if Democrats are acknowledging that the payroll tax is a disincentive to hiring, and that the state can afford to sacrifice revenue in the short term if doing so puts more people back to work, why not get rid of the payroll tax entirely? Why not pursue broader, simpler tax reform that lifts a big burden from businesses, rather than a temporary break that complicates tax law? Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, is open to the idea of replacing the payroll tax with a tax on business services. Good for her.

A consensus clearly is emerging in Nevada: Some taxes and state policies are holding back job creation and a broader economic recovery. Economic growth will provide the state with additional tax dollars for K-12 schools, higher education, public safety and mental health services.

They’re onto something. They just need to follow through.