Path to a business tax, narrow but not impossible

CARSON CITY – The Nevada State Education Association’s 2 percent business margins tax is now a reality: Either it will be passed by the Nevada Legislature in the first 40 days of the session (highly unlikely) or it will go before voters in 2014 (mandatory).

So is there room to make a deal?

Could majority Democrats argue to Republicans that — because voters ultimately may approve the teachers union tax in November 2014 — it’s better to craft and pass a more acceptable business tax now? In light of the fact that the union’s initiative petition tax cannot be altered, the Legislature could devise a tax that avoids the pitfalls of the union’s effort. In exchange, theoretically, the teachers union could be induced to sign on to the alternative and then tell voters next year that the initiative version is no longer necessary.

Some Democrats think that’s possible. But do Republicans?

State Senate Minority Leader Michael Roberson reluctantly said today he wouldn’t rule out a business tax,  but insisted he’d have to see specific detail before he’d agree to anything. However — and this is significant — he said any tax passed would have to be revenue neutral. In other words, you could get rid of, say, the payroll tax and replace it with a sales tax on services, so long as the state wasn’t collecting any additional money.

And if you’re thinking that kind of defeats the purpose of passing a new tax, you’re absolutely right. Democrats want to raise more revenue to spend on education, including full-day kindergarten, class-size reduction and higher education job training initiatives.

“I’m open to broadening the tax base in a revenue neutral way,” Roberson said today. But he vowed that no net tax increase will pass the state Senate, where Republicans hold 10 seats. (In order to pass a tax, a two-thirds vote is necessary, which means 14 votes, or three Republicans in addition to all 11 Democrats.) Roberson said extending a package of supposedly temporary taxes — which he’s already agreed to do — isn’t a tax increase. (And he’s right about that.)

Although an interim study on expanding the state sales tax to services has been proposed by the Senate’s Legislative Operations and Elections Committee, with the results due only in 2015, Roberson said that would not necessarily preclude the Senate from passing such an expansion in this session.

 

2 Responses to “Path to a business tax, narrow but not impossible”

  1. Mr Ed says:

    Should Nevada get extra anti-terrorism money from the Federal Government? If we are a base for killing people, wouldn’t that make us more of a TARGET?

  2. Steve says:

    You tax lovers may want the voters to decide.

    Think about it. If they do pass a revenue neutral margins tax as a way of broadening the base which initially lowers taxes on the existing base. (something you tax lovers also like “broadening the base” to feed the bear) It would take a few more sessions of the legislature but the newly broadened base would see its rates increased resulting in more revenue over a larger section while keeping the impact low on individual sections. This actually makes it easier to (sell to the taxpayers) raise revenue but it takes a long time.

    The voters may feed your tax loving gaping maw much faster.