Margins tax would discourage business

Matthew Glans, Las Vegas

Thursday, Dec. 19, 2013 | 2 a.m.

Nevada’s margins tax would be poor tax policy for several reasons.

First, because the margins tax would be imposed on total revenue and not the profits of a company, businesses would pay regardless of if they are struggling. Companies barely staying afloat would be forced to pay a tax that may help put them out of business. The end result would be more failing businesses and higher costs to consumers.

Nevada is one of the few states that doesn’t impose a corporate income tax, a tax considered by many to be one of the biggest barriers to economic growth. Texas has a similar margins tax that has failed miserably. Imposing the new tax would further complicate the tax code while discouraging new investment in Nevada.

Nevada should not replicate this failed policy but rather focus on tax policy that helps attract entrepreneurs and job creators rather than tax policy that discourages them.

The writer is a senior policy analyst at the Heartland Institute.