Hobbs, Sloan blast payroll tax plan

Tuesday, July 22, 2003 | 9:27 a.m.

Two members of a task force that recommended ways to make Nevada's tax revenues more stable blasted the state Legislature's proposal to create a payroll tax by saying it would penalize workers while exempting too many businessmen, including some lawmakers.

Former Clark County chief financial officer Guy Hobbs and Mandalay Resort Group senior vice president Mike Sloan made the comments in a televised interview on "Face to Face With Jon Ralston" on Las Vegas ONE, Cox cable channels 1 and 39.

Hobbs and Sloan, members of last year's Governor's Task Force on Tax Policy in Nevada, also complained that the Legislature opted only to consider short-term tax proposals rather than the 10-year recommendations made by the task force. As a result, Hobbs said he thinks the Legislature will have to look at fixing the state's tax structure in future sessions.

"One way to sum up my feelings about this whole thing is just to call it a wasted opportunity," Hobbs told Ralston.

Sloan estimated that 180,000 to 200,000 Nevada business people would be exempted by the proposed payroll tax since it would exclude people who do not pay unemployment insurance.

"The payroll tax is filled with exemptions," Sloan said. "Every self-employed person is exempt. All partners in a partnership are exempt. Directors of businesses are exempt. People in telemarketing and in real estate who live on commissions are exempt. It's not even a payroll tax. It's a tax on unemployment insurance."

A Las Vegas Sun story published on July 13 that explored how legislators would be impacted by the proposed new taxes caught Sloan's attention.

"It's surprising how many of them are consultants, self-employed, so the first thing they did is apparently exempt themselves," Sloan said.

Instead, they pushed for a payroll tax that would hurt working men and women, he said.

"This is the only state in the union that's going to have a tax based on an expense on payroll," Sloan said.

Sloan and Hobbs also said the payroll tax would be a disincentive to companies with high-paying jobs that were thinking about coming to Nevada.

"Here, we're going to be penalizing people for creating good jobs," Sloan said. "It's crazy."

Hobbs, managing partner of the Las Vegas consulting firm Hobbs, Ong & Associates, stood by the task force recommendation of a proposed new tax on gross business receipts because of its long-term stability. That proposal was rejected by lawmakers, however.

"We did try to give them something more forward-looking than just the next biennium and I'm not sure that was taken that seriously," Hobbs said.