In Nevada there is a proposal on the ballot in November to institute a margins tax on Nevada businesses. The proceeds will, according to the proposed statute, be deposited in the State general fund and used for K-12 education. One can argue against (or for) such a tax, but that’s not why I think I probably will vote for it. I am a Realtor, and today at our monthly agency business meeting someone brought up this tax. It is, the person said, to be a tax on entire gross business income, and further will not necessarily be used for education. So, unlike most people, including, I’m sure, those who signed the petition to have it enacted, I read the entire proposed act. It isn’t easy, but I really did do that. And I learned a thing or two.
The first thing that I learned was that, in fact, under the proposed statute, a business will be taxes on the exact same income which is taxed by the Federal government. yes, the first line of Section 24 does indicate that the lesser of 70% of total gross receipts reported to the IRS or the results of a formula (it doesn’t matter what the formula is for this argument) will be used as the starting point of computing taxes owed. Well, first off, 70% isn’t 100%, but that isn’t the big lie. As I read through Section 24 I discovered that any allowable deductions on a Federal level will also be allowable deductions for purposes of the proposed tax. Anyone who can read can find out the same thing by simply reading the proposed statute. Or, put simply, the notion that we will be taxing small businesses to death is simply a lie. There is also a provision, right up at the top of the statute, that any business with gross revenue under one million dollars is exempt. So if you gross $999,999.99, you pay zero margins tax, even if half of that is profit. That sounds like the sort of argument made against this proposal, and logically it is. However, my statement has the virtue of being verifiably true. As to where the proceeds go, well, the act says to education. If people fight to redirect other general fund monies away from education, then this proposed statute can’t stop them. So, hey, that statement from this morning is true.
The person who made the statements also made a point about being cynical and bitter. Cynical and bitter enough to believe things that aren’t true? The fact is that our government is just about exactly as greedy as we are, which says a lot about those people who think that the government is nothing but a bunch of greedy income snatchers, in my not so humble opinion. But, who cares about education anyway? Hell, Bugsy Siegel didn’t go to college, and he’s a local hero! (Hey, Steve Wynn did, and look at him, huh?) Here’s my answer:
From the Bureau of Labor Statistics for February 2014, here are the unemployment rates for various levels of educational attainment:
- Not a High School Graduate — 9.8%
- High School Graduate, no college — 6.4%
- Associate’s Degree, or at least some college — 6.2%
- Bachelor’s Degree or higher — 3.4%
Just finishing High School makes you 1/3 less likely to be unemployed. And if you’re employed, you’re paying taxes, buying things, and generally keeping the economy moving along. You are not collecting unemployment, and probably not on food stamps or other type of public assistance. Paying for education is a great investment for a society to make, and a business owner should be more aware of that than anyone, since unemployed people make lousy customers, what with their general lack of disposable income. Want to cut your chances of unemployment by another third? See above and finish college. All four years worth, that is. But that’s another argument for another day.
For today, barring some true reasons to oppose the margins tax popping up, I’m likely to vote for it if only in revenge for being lied to. I just can’t stand being lied to.
By the way, you can read the proposed statute yourself right here.