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Wednesday, June 6, 2012 | 12:44 p.m.
Lynn Warne
Sun Archives
The Nevada teachers union filed a business tax initiative today that would raise $800 million a year — an outgrowth of the frustration with the failure of the legislative process to increase funding for state government and schools.
If successful, the petition would create the state’s first tax on business income.
“The Education Initiative,” which is supported by the Nevada State Education Association and AFL-CIO, the state’s largest labor umbrella group, would tax businesses generating more than $1 million in annual revenue.
“Funding for education is inadequate,” said Lynn Warne, president of the Nevada State Education Association, after filing the initiative. “This tax is broad-based and fair.”
The tax, based on a failed Democratic proposal in 2011 and the so-called Texas “margins tax,” would be 2 percent on either 70 percent of a business’ total revenue; or total revenue minus the cost of goods sold or the amount of compensation paid to owners and employees, whichever is less.
Revenue from gambling, which is already subject to a special tax, would be exempt. Mining, which is also subject to a special tax, would not be exempt.
The money would be earmarked for K-12 education, but Warne acknowledged that money could be moved around in the budget to fund other things, such as public safety, health care and higher education.
The margins tax would end Nevada’s status as one of only three states without some type of corporate income tax, a coveted distinction for conservatives in Nevada.
“This margins tax would be a disaster for Nevadans,” wrote Geoffrey Lawrence, deputy public policy director of the Nevada Policy Research Institute. “A business margin tax will only further squeeze struggling private firms, dampening their ability to hire and suppressing growth in wages. This pain will be felt by families across Nevada.”
Warne said she does not believe this would hurt job growth or creation, arguing the tax targets businesses with more than $1 million in net revenue, or those “who are not paying their fair share.”
Warne said the tax is a good alternative to the state’s payroll tax — which the group would work with the Legislature to repeal because “we believe it hurts businesses' ability to hire.”
A repeal of the payroll tax could not be included in the initiative because it would violate the state law requiring initiatives to adhere to a single subject.
The modified business tax, as the payroll tax is called, generates about $370 million a year.
The coalition will have to collect more than 72,000 signatures by November to qualify the initiative. Warne said the union has money for signature gathering.
If successful, it would go to the Legislature in 2013, where lawmakers would have 40 days to pass it, reject it or put an alternative on the ballot. If it’s not passed, it would go to voters in 2014.
The tax would require a two-thirds majority of lawmakers to pass, making it almost certain to be rejected in Carson City. If it goes to the ballot, where it requires a simple majority to pass, the tax would begin to accrue Jan. 1, 2015, and be due Jan. 31, 2016.
The tax initiative has been discussed since the waning days of the 2011 Legislative session, more than a year ago. But a broad coalition of labor, gaming, mining and large business groups never came together.
Warne said she is talking with business groups in an attempt to gain support for the measure.
Ah yes, typical union and government employee proposal....why just RAISE TAXES...yeah, that's the ticket!
NO WAY you are getting a tax increase, government has MORE than enough money, they just choose to waste much of it...how else could you pay firefighters $175k PER YEAR, or propose buying street art for a mil., or (the list is endless)...time to CUT BACK government, you know, like those of us that pay the bills have had to do.
NO NEW TAXES
Apparently the teachers union & their socialist-minded "leaders" aren't paying attention. Didn't they take notice of what occurred in WI yesterday? Voters told unions, big spenders and tax increase advocates to take a hike. Enough of this "fair share" BS! Let's get government to live within its means just the way we have to do when faced with less money. We cut somewhere and don't go deeper in debt unless we want to hire a bankruptcy attorney. The pencil-pushing, bureacrat drones and their pets, aka, the unions, must get the message and soon. "We're mad as hell and we aren't going to take it anymore!"
I'm exhausted with the term "Fair Share". Will someone presenting the intiative please define what this means? I agree with today's first comment. Gov't has enough money. Look at the percentage of each "gov't department's" budget and see how the percentage of each has grown if you look at one item....payroll...Are we as taxpayers getting the same "bang for the buck" with the increased payroll expense.....I think everyone knows the answer to that, especially anyone in private business.
Interesting to get more details on the story. Not as unreasonable as I first thought. I'm not a big fan of raising taxes before government entities are streamlined, but the options that were presented seem reasonable, at least at face value. Need to learn more and see more details. Of course NPRI is going to have a kneejerk, "all tax is bad" reaction without even digging in to the details.
listen everyone blames the union...oh the union this the union that...it's not the unions...it's the people who negotiate the contracts fault who acceptted the contracts in the first place....when the economy is good they dont think ahead...that and the state and the fed needs to look at themselves in the mirrors to find the real probelms...and that is they are constantly WASTING our tax dollars for there pet projects, or othe such nonsense...take here in las vegas for example. they expanded the lanes on the fifteen through town.. then they have a bone headed idea to place dividers inbetween the lanes....look how many of those divders get runover evey week . those themselves by the time you factor in labor to replace them run about 200 a piece. if your replacing 15 to 30 every week at 200 a pop 52 weeks a year it adds up... the problem is the fed and state govt's think they need to micro manage everything they see... thats the real problem
The unions support taxing businesses that generate more than $1 million in REVENUE....not their profit, no, the unions want their cut right off the top!
There are many businesses generating revenue of $1 mil. or more that struggle to stay open, even losing money regularly.
Can't get over the audacity of the unions and their shills, government employees, with their productive idea of tax increases....is that the best idea you got, you greedy self-serving...
In 2009, the mining industry had gross revenue of 5,800,000,000. After deductions, including some that may have not complied with state law, the net profit was 1,800,000,000. The tax paid to the state of Nevada was 48,600,000. For comparison, in 2010 gaming had the same gross revenue and paid over 425,000,000 in taxes to the state.
The state of Alaska collects a royalty of 25% on oil. Alaska currently has a 3 BILLION surplus in the state budget, and Exxon just reported record 1st quarter profits of over 10 BILLION, so the royalty payment doesn't seem to be causing the oil companies financial problems.
The Barrack annual report has just been published, and shows record profits and dividends above the record levels of 2009. This is a link to the report, you may want to look closely at pages 2, 3, and 4. http://media.lasvegassun.com/media/pdfs/.................. Net earnings and profits have jumped dramatically between 2009 and 2010. Shareholders return on investment jumped from 12% in 2009 to 19% in 2010.
In 2010, the Cortez Hill mine in Nevada produced 1.14 MILLION ounces (31.6 TONS) of gold at a cost of $312 per ounce. In the first quarter of 2011, the mine produced 366000 ounces (11.4 TONS) at a cost of $220 per ounce. Assuming a profit of $1000 per ounce that is a profit for $366,000,000 for the first quarter. Assuming the rate of production and costs remain the same, that is an annual profit of $1,344,000,000 for one mine.
Nevada is one of the largest producers of gold in the world. Assuming a profit of $1000 per ounce, that amounts to a profit from one mine of $366,000,000 for one quarter. That amounts to a profit of $1,344,000,000 if production for each quarter remains the same. To put that amount in perspective, the proposed budget for CCSD for the 2012-2013 School Year is just over $2,000,000,000. Of that profit, Nevada will see between $10,000,000 and $20,000,000 based on current rates.
When you talk about "government spending", you need to be careful. Each government, like Clark County, Henderson, Las Vegas, North Las Vegas, CCSD are all independent and the fact that money is wasted in one government doesn't mean that another governemt is wasting. CCSD has absolutely nothing to do with funding of fire departments.
Since 2008, the CCSD budget has been cut approximately 500 MILLION. The proposed budget for the 2012-2013 school year is just over 2 BILLION. The cuts amount to 25% of the current budget. All of the easy cuts have been made.
The queston I would ask is how much is the future of our children worth? We have had "low business taxes" for years and how many large businesses have moved to Nevada? How many businesses have started? How do you answer the question from a business thinking of moving to Nevada, "What are the schools like?"
Dump the overpaid "administrators" in education and then we can be more reasonable about funding more money for it. So many businesses and organizations are top heavy nowadays, that it's becomming difficult to fund anything. I'm not paying more in taxes so some fat-butt can push papers around and make his/her six figures.
Bunch of idiots. They obviously didn't see what happened in Wisconsin. How about Gov Sandoval start implementing the same types of reforms to the public sector unions here in Nevada. The economy is tanking and all they know how to do is propose higher taxes.
I like how people post numbers about how a company has made an X amount of profit as if all that money goes into a greedy CEO's pocket. They throw those numbers out but forget to calculate the costs involved with doing business such as payroll, benefits, overhead, equipment purchases and replacements, training, advertising and all the other numerous expenses associated with running a business.
Nice try (not really) unions, you knew you had ZERO chance of getting a property tax increase so you thought maybe you can get your shills in government to slip in a business tax.
Of course all in office who help pass this tax would get your full support and endorsement at election time.
Besides, "businesses" can't vote, and by the time the sheep realize how much the tax will end up costing them...too late!
Your every attempt to wrench yet more money out of taxpayers will be exposed and opposed until government spending is brought in line.
How about asking the true consumers of the system to pay their fair share of the education burden. I am talking about the families that send their children to the schools. The funding sources for CCSD include property tax revenues. Yet not all property tax owners will pay the taxes on time or at all but will wait until that delinquency notice shows up as a tax lien sale notice.
A significant population of CCSD students come from renting households. The renting households do not directly contribute to CCSD funding, instead relying on the property owner for the funding. Depending on the individual, the proposed 2% tax may end up having the effect of double taxation for CCSD, once for the property tax on the rental property and the additional 2% if the entity will make over the targeted amount.
If the NSEA/AFL-CIO is championing this proposal based on fairness & promulgating all to pay their fair share for education, then it would logically follow that all would need to pay into the system, both large and small, businesses & individuals.
To create a little perspective, which I'm sure will be ignored, let's take a look at the latest figures, 2011, for the "Total Percentage of Taxes Paid" based on yearly income in the state of Nevada.
(Cited from the Institute of Taxation & Economic Policy, far more reputable than NPRI!)
Yearly Income : Taxation Level
Less than $21k : 8.9%
$21k-$34k : 7%
$34k-$53k : 6.4%
$53k-$86k : 5.7%
$86k-$166k : 4.5%
$166k-$574k : 3.2%
$574k or more : 1.6% (Top 1% of Nevadans)
Ok, back to your regularly scheduled mudslinging and opinionated innuendo! (Remember, if you can't reputably cite it, you're lying.)
I grew up in LV and live here, but my company is incorporated in Wyoming for many reasons. Not only do they not have a corporate tax, but fees are over 50% lower than NV to file, etc, and they don't require or report the owners SS# to the feds, NV does. This new tax would force corps to leave the state in droves, backfiring on the intent. You don't have to do biz in WY to incorporate there, so why not incorporate where you will put the most money in your pocket at the end of the day?
Those who don't pay their fair share?
I'm pro-teacher but this name calling smacks of dirty politics.
First lets get a list of all the active teachers in Clark Co who are small business owners. Then lets do a line item report on all the taxes and fees that SBOs pay.
Then, lets dissect teachers pay and benefits packages and see who's not paying their fair share.
How much do they pay for health insurance, life insurance; contributions to their retirement, etc. How about all the non-taxable perks like free internet accounts?
I could be wrong but I wonder if they can stand the comparison to those they want to tar with their name calling.
This was the first year in a long time that graduation rates were above 60%. How about we get some results before they get some more money.
The teachers are like having a drug addicted junkie of a brother in law asking for another $80 and promises to get clean right after he gets it.
Nevada teachers....read about Wisconsin. This is ill timed.
I am assuming the union wants the money for higher teacher pay, they should just state that. The way the tax is calculated is crazy, on gross revenue, on adjusted gross revenue or a payroll tax, as in the amount paid to the employees and owners. I think they are just throwing a net out and see what is caught in it. Schools are funded thru real estate tax as well, and that is where it should be looked at, or better yet a portion of sales tax, say add 1/4% to the rate so everyone pays not some weird tax on business idea. How about a baby tax? When a new home is built there are impact taxes, when a new baby is born time to pay an impact fee!
Enough with the fair share BS and class warfare. How about it being truly fair share and vote to impose it on everyone. I am so sick of paying for those that don't want to. I am going to fire the 100's of employees and not pay it. Who is that gonna benefit. I will tell you. ME! I will have less stress, not pay this tax, and go on about my day. It sure is gonna suck for those I fire though!
The tax is going to target union slugs and thugs??!!
these are the people you want teaching your kids????
this school system mismanages huge sums of money each year and never, never, never goes a year without asking for more money---every year some goof ball has some goof ball idea to take more money and throw it at the school system like money will solve the problem---and it never does!
MickeyA,
You are mistaken about the State of Nevada working and reporting to the feds.
They don't even ask for your SS number and when setting up LLC's in this state they don't even know who OWNS the LLC's.
If you read the codes regarding Corp's in Nevada you will see they do not play well with the Fed's at all.
The fee's in Wyoming are less. Wyoming also has some of the highest taxes on their residents and property.
I do business here, live here, I will pay my fair share here.
Yesterday the Union said this would raise One Billion over two years, today they say 800 million a year. They don't have a clue what they are talking about. They also stated this was going to be a tax on NET PROCEEDS. Now you can deduct your product cost or your labor cost but not both? That is not NET PROCEEDS.
The union forgets, business does not pay taxes, customers pay taxes. The way it always has been and always will be. Prices have to reflect the cost of doing business.
The last thing this state needs are more taxes. This proposal by the unions is crazy. Businesses are still struggling and can not afford to pay more taxes. Go after the mining industry and its slew of lobbyists. They have plenty of money. Taxing small business will mean more money in the hands of essentially unproductive and worthless administrators who are not involved in the education of your children.
@NVFisherman. This is about all businesses paying for the education services that provide them the skilled educated work force they need to grow and improve their businesses. Define small business for me. This is addressed to businesses that make over a MILLION per year. With this money, the threatened layoffs of 1000 teachers could be avoided, and the budget cuts to CCSD could be restored, you know the 500 Million since 2008.
A gross receipts tax like they have in Washington State is wrong. A business can have huge amounts of revenue and lose money and it is unfair to tax them if they are unprofitable. My gripe has always been the overpaid administrators who add to the cost of education. Most school administrators would work three times as hard in private industry.
I have a better "tax".
Let parents pay for their own kids education.
Mr. Lucky, teachers don't run the system.
Comparing this state to others who tax business more and talking to teachers or their families from other states is enlightening. Outsiders where education is good can't believe what goes on here.
I'm not in favor of going after small business with modest profit, but mines and casinos and Wal-Mart and its ilk are no-brainers.
There are some really good teachers here, but a lot of intelligent people would prefer elsewhere, or even out of teaching, and many of them leave. Quality costs.
Also, the cost of things like the new star system and Jones' increase in administration need to be targeted.
Wow. It's hopeless, I think.
The problem trying to improve education where education is bad is that so many people who live here are so ignorant relative to where education is good. Just look at the comments.
What a scam. These overpaid pension fools think that everyone is stupid. A company with revenues of 1 million dollars that has a 20% profit, only earns 200K. That's not even equal to what the union thugs make.... Want to tax someone. Teachers, start paying for your own retirement, my G od, you only work 9 months out of the year.
Schools have plenty of money, go away. Personally I think cuts are in order.
They need to change the $1MM in revenue qualifier, and they need to reconsider what they're taxing. It sounds like someone that doesn't understand business wrote these rules. I understand that companies take advantage of their situations and include a lot of ridiculous items in the "expense" category, and/or they get creative with inflated compensation, just to avoid paying certain corporate taxes. But simply looking at revenue is the other end of the spectrum.
@stephenrblv. Since 2008, the CCSD budget has been cut by approximately 500,000,000. The proposed budget for 2012-2013 school year is just over 2,000,000,000. So, CCSD has lost 25% of it's budget in less than 5 years. What would you suggest they cut?
For starters he Athletic Department at Arbor View HS. Why are we paying 3 people close to a quarter of a million dollars to run something which we could lose tomorrow? That is just one example I picked at random from a salary list somebody posted on here a few days ago.
When I went to HS we had no AD, what we had were some teachers who stepped up and taught PE because they liked sports. It was called PE back in those days. Funny part is, our school sent many students on to fine universities. Several played in the NFL and Major League Baseball.
@stephenrblv. Ok so you want to cut 250k from a 2 billion dollar budget. What else? No band? No sports? No choir, nothing besides English, Math, and Science?
The government beast needs more of your money and also it wants you to work harder for less money so that the beast can get more money from your employer.
Bow down to the government beast.
He is your master.
Oh ya cut that silly department out and keep slashing. You got $5200 by State Law to spend, get busy trimming. Last numbers I saw they are close to $1500 per above what they should be. You have had 2 yrs to cut now.
No biggy you cut the stupid out and get back to the core mission. The schools are fine with old desks and boring landscaping. Jack the English teacher can teach track just fine. Music? don't need it kids like the computer generated stuff anyhow. Choir? same thing, boring.
Just in case you missed it, this community is in full blown Depression. Whining about trimming education is not even debatable. Doesn't make us bad people. It is simply reality.
It does not matter how much tax is levied on businesses; the state lawmakers will ALWAYS find some way to funnel that revenue into their own pockets.
"(Cited from the Institute of Taxation & Economic Policy, far more reputable than NPRI!)
Yearly Income : Taxation Level
Less than $21k : 8.9%
$21k-$34k : 7%
$34k-$53k : 6.4%
$53k-$86k : 5.7%
$86k-$166k : 4.5%
$166k-$574k : 3.2%
$574k or more:1.6%(Top 1% of Nevadans)"
Sebring? I think those tax figures are dead wrong. Why? I make less than 25K and my tax rate is 16% on my paycheck, more than twice the rate quoted on your source. You might want to ask your friends instead of trusting some propagandish website.
@stephenrblv. How do you think that the city will get out this recession? By cutting education, so we don't have a trained work force? That's a real good way to attract new businesses. How has that low tax thing worked out for attracting business?
If you saw the article about the 7 National Merit Scholarship winners from CCSD, 6 were going out of Nevada for college. Do you think that they will come back?
Do you want the only job your kids and grandkids to be qualified for a jobs that pay minimum wage? Are you content with being last in the nation is per pupil spending? You get what you pay for.
Jack the English teacher can't teach track. Not endorsed for track. Teachers have to be licensced for the subject they teach by state law.
Studies have shown that music programs help students with math and science.
@JeniferAD. How can the tax rate on you paycheck be 16% unless you are talking about Fed taxs and social security. I believe the percentages quoted are for state taxes like sales tax as a percentage of income.
@Tanker1975
Vegas is not coming back until it reduces it's size to a million people. That is number we have water for. The Boom was bs based on stealing water by greedy out of state developers and opportunistic bureaucrats padding their salaries IMHO. That has now ended. The collapse has assured there will be no repeat, third straw or not.
Education is just another sinkhole of a boom gone bust. Vegas was never supposed to be a metropolis. Attempts to make such are laughed off by most long-term locals as the bs they are. Vegas is what it is and the sooner we get back to business the better off all the serious residents will be.
Sorry but that is my opinion. If you have kids, and can get out, do so asap. If you are stuck here, do the best you can with the resources available.
Not hard people. Doesn't require an PHD in astrophysics or even an MBA. We sell Gambling, Sex, Booze, Parties, and Conventions. If we can get enough of these empire builders to go back to where they came from, we can work on legalizing prostitution and pot.
@stephenrblv. Sorry you have such a pessimistic view. Sorry to tell you, but I don't think Vegas will ever drop back to a million.
If you want to sell the brand of Vegas as gambling, sex, booze, parties, and conventions, the people who provide those services still have to live here, and their families as well. You will never change Vegas from a metropolis. We will have all the things any other city has.
So, if you have such a negative attitude, why are you still here?
JeniferAD, those rates do not Include SS or Medicare payments taken from your check so your rate may vary.
If you are paying 16% and SS and MED on top of that then you are being ripped off. Someone making what you are should end up getting 100% back at the end of the tax year.
Not a negative attitude it is a realistic one. I am here for the reasons I moved here 2 decades ago, I like living in a place as bizarre as this. For me that is normal. I love the desert. I love the hot disgusting marvelous heat.
This is Las Vegas. This is not Boston or Seattle. We are what we are and I am sick of those who cannot accept and desire to change what we are and essentially kill the town. Low rankings for schools is a warning sign, stay away normies. This is not your place.
What people like you Tanker1975 do not understand is you are being played. You are being sold a bag of rocks. Fundamentally your vision of society is not possible under our State structure. We are setup with the knowledge most of the State is under Federal control. Civilian uses are limited. Many of the systems you view as "starving education" are really the result of needs to protect the State's biggest land owner.
When you run black ops and blow things up, the last thing you want is the public hanging around.
Tax mining? good luck with that one. Again understand what you are up against. Understand one of the main protectors of that industry is probably the biggest Liberal in the Senate. You may win a small concession but do not look there for funding. Just do what you can with what you have.
Viva Las Vegas! Viva Nevada!
I am confused. Any company with more than a million dollars in net profits will pay a 2% on those profits. This should generate $800,000,000 in yearly revenue.
So the total corporate profit in Nevada, not including casinos ans mining is upwards or forty billion dollars? Is that true? What is the total non-gaming/non-mining corporate profit in Nevada. How many companies are pulling down a million bucks in profits?
Sebring says "(Remember, if you can't reputably cite it, you're lying.)"
Then sir, I have to say that you are lying. Please provide a specific link to your source for this set of "latest figures, 2011" you claim.
Because the ITEP's most recent report was published in 2009 and the Nevada data in that report was cited as being from 2007" .....and interestingly enough, their 2007 numbers exactly match the numbers you claim represent 2011 values.
If you check the methodology section of their report you will also find that there are siginificant flaws and assumptions since the figures in their report are not based on hard data, but on a theoretical model they have built to predict what they think the actual numbers might have looked like.
JeniferAD says "Sebring? I think those tax figures are dead wrong. Why? I make less than 25K and my tax rate is 16% on my paycheck, more than twice the rate quoted on your source."
Really, you can show us a 16% STATE tax on your paycheck? Please give us the details. Keep in mind that the discussion is purely on STATE tax (as are the numbers Sebring inaccurately cited), Federal taxes are not the topic.
http://www.itepnet.org/wp2009/nv_whopays... <-citation (you're move)
There's the link. For people complaining that their taxes are higher. You are including federal taxes in your figures.
For anyone truly interested in further cross referencing joy there is also http://www.itepnet.org/wp2009/nv_whopays...
"So the total corporate profit in Nevada, not including casinos and mining is upwards or forty billion dollars?"
If you don't include mining and casinos which make up at least 75% of our economy then there probably are profits at or above 40 billion. However, this tax wouldn't exclude those sources, it would actually target them, along with big box retailers like Walmart. Most businesses are NOT making a million in profits. While the ones that are making a million in profits usually are making far greater than a million in profits. Keep in mind these figures are after paying labor and operating expenses. We are talking about companies making over a million in pure profits.
I'd love to say with certainty how much is make in profits for companies making over a million in profits except that they don't publish those numbers outside individual federal tax returns. (I'm not sifting through millions of those. I believe the petition creators have though.)
The closest I can get you is the total GDP for 2011 of $116,773,000,000 (116 billion) from http://www.bea.gov/iTable/iTable.cfm?Req...
Anyone interested in other figures there are a couple decent resources to browse. http://www.lvchamber.com/sites/default/f... & http://tax.state.nv.us/pubs.htm#annual
Sebring "http://www.itepnet.org/wp2009/nv_whopays... <-citation (you're move)"
Now go to that link for yourself and look. The report title says "Third Edition - November 2009"
Now go to page 71, titled "NEVADA" and note that it says "State & Local Taxes in 2007"
Then come back here and try to defend your claim "let's take a look at the latest figures, 2011"
Remember, you are the one who said "(Remember, if you can't reputably cite it, you're lying.)"
Having just proven that you blatantly misrepresented five year old data as being from last year, I'd say that "reputably" went out the window....making you, by your own statement...a ?????
And I'd strongly suggest that crimcops and sebring go back and re-read the article. Not sure where either of you got off track, but where does the word "profit" appear the in article?
The tax would be on businesses with an annual REVENUE of $1 million or more, not a profit of $1 million or more.
Go look up the definitions of "revenue" and "profit", then come back and try again.