Is Nevada destined to follow New York’s example? We’re beginning to show signs of doing just that regarding taxation of business in the Silver State.
Anyone watching TV in the past few months has probably seen slick ads inviting businesses to come invest in New York and enjoy a 10-year tax holiday. This follows years of state government in Albany treating business as a cash cow to be milked for every possible dime to pay for grand social schemes that mostly benefit the big cities at the expense of the rural areas.
And of course the subtext behind the TV message to potential investors is “some day we will be milking you too if you give us a chance.” Why any business would relocate to a state that’s not friendly to investors is baffling. It would be short-sighted to do so in order to get short- or medium-term benefits knowing full well what New York’s history has been regarding investment.
And now, only a few months after Nevada voters made an unequivocal statement at the polls opposing higher taxation, we appear to be setting off on the same course as New York regarding taxation of business in Nevada. Gov. Sandoval has proposed, and the state Senate has approved, a plan to tax business instead of individual voters. We’re waiting now for the Assembly to vote on this gross receipt tax.
Does anyone believe business tax does not eventually filter down to individual shoppers? Any time you as the consumer approach a cash register the owner of that business has already factored in his costs of doing business: rent, utilities, labor, and the taxes he pays. If the gross receipt tax is approved you may rest assured it’s ultimately going to be factored into the bill you pay as a consumer of both goods and services. To do otherwise would drive the business to ruination.
So that tax we voted against last November has just been partially approved by the officials we elected to represent us. It feels dishonest to me. “For the children,” they say. If it really works that way — and it’s not definite at this point in time — the educational establishment is going to receive most of the new revenue.
The assumption is more funding for schools results in better education. No one yet has been able to offer proof positive more money improves educational achievement. In fact there are plenty of examples to the contrary across the country. We have more electronic devices in classrooms and more standardized tests, but fewer high school graduates are ready for college.
Our own governor sends mixed messages about whether he wants to woo business or milk it. Consider the irony of offering a $1.25 billion tax break to Tesla to bring its battery manufacturing facility here. Elon Musk stood next to Gov. Sandoval last September and congratulated Nevada for being forward-looking in our policies. Musk should know: he relocated here because of the terrible business climate at home. So how does our governor follow that coup? By pursuing California’s (and New York’s) pernicious lead on business taxes.
At this rate our state will be advertising on national TV some day, offering to roll back this tax for any business that will invest in Nevada. We have a competitive advantage right now in our tax structure. We should not give that up, and especially not in response to a deceptive tax hike we have already rejected at the polls.
Fred LaSor is a retired Foreign Service Officer living in Minden.
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