Kill it, don’t raise it

In the state with the country’s highest unemployment rate, it makes no sense to tax job creation.

But the Nevada Legislature came up with a worse idea: raising taxes on job creation.

On Monday, Senate Majority Leader Mo Denis, D-Las Vegas, introduced Senate Bill 514, which would increase the modified business tax from 1.17 percent to 1.5 percent on payroll over $250,000. For the mining industry, the tax would increase to 2 percent. The bill would suck more than $125 million per year from employers’ bottom lines, giving them less money and less incentive to create new jobs.

The current rate is supposed to expire June 30 and drop to 0.63 percent, but Gov. Brian Sandoval and most lawmakers have agreed to, at a minimum, extend the rate of 1.17 percent for two more years.

Tax reform is daunting for any legislature, and not just because of political pressures. Asking a business to pay or collect a new tax is a big deal. There are practical and logistical hurdles, to say nothing of the costs. That’s why Democratic lawmakers, in introducing their tax plans with just weeks remaining in the 2013 session, have proposed increasing or expanding existing levies. The structure to collect them is already in place.

The goal of this session should have been the elimination of the payroll tax and the expansion of the sales tax to services and other transactions, with a reduced tax rate. That’s a pro-growth tax policy. That would have led to more funding for public schools. That would have helped put Nevadans back to work.

SB514 is the wrong approach.

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