ELKO — The margin tax initiative would drastically affect businesses and not necessarily fund education, a coalition argued at a forum Thursday.
The event was hosted by the Elko Area Chamber of Commerce’s Government Affairs Committee at the Hilton Garden Inn.
“This is a margins tax, not an education initiative,” said Neal Levine with the Coalition to Defeat the Margin Tax Initiative.
Levine, along with other coalition members, rallied for support of its $7 million campaign against the margin tax initiative.
While funds from the tax would go into the Distributive School Account, Levine said, there is no guarantee written in the bill that the money would go toward education. Rather, it may be taken out of the fund to pay for other things, he said.
“The margin tax lacks any sort of accountability,” Levine said.
Furthermore, he argued that there would be huge effects on the economy and labor. It would affect roughly 14 percent of businesses in Nevada, but a large percentage of the workforce, Levine said.
“This hammers the trades, this hammers laborers,” he said. “This is a recovery killer.”
The margin tax initiative proposes a 2 percent tax on businesses that make more than $1 million in revenue. One of the main arguments against the tax is that it is not based on actual income after expenditures.
“You’re taxed on your margin. Profit has nothing to do with it,” Levine said.
Matt McCarty, Government Affairs Committee chairman and owner of the Marriott TownePlace Suites, said annual revenue of $1 million is equivalent to about $2,800 per day. For a $28 meal, that would take only 100 customers to reach that benchmark.
“What restaurant do you know of that doesn’t see at least 100 people a day?” McCarty asked.
Elko County Commissioner Jeff Williams, who commented at the meeting, said a million dollars in today’s world is a “very small business.”
The coalition made no attempt to tell the audience why people would vote for the measure. Williams asked the coalition where he could find opposing viewpoints, to better educate people.
“Frankly, it’s their job to get their message out — it’s our job to get our message out,” Levine replied.
Proponents for the margin tax include the Nevada State Education Association and PLAN.
Paul Enos, CEO for the Nevada Trucking Association, who also spoke out against the margin tax, conceded that the coalition should not make its argument based on funding for education.
“When it comes to funding education, that’s a debate the teachers have already won,” Enos said. “... We have to focus on what the margins tax is gonna do to the economy.”
Roger Cody of Elko argued that the coalition should address the topic of education funding, saying education did not need more money in Nevada. Cody compared students today to students of a few decades ago.
“Education was much superior then than today, when money is being thrown at these folks,” Cody said.
Dylan Shaver, Director of Public Affairs for the Nevada Mining Association, said that even if the margin tax added money to the DSA, there would be no effect locally.
“Adding money to the DSA isn’t going to do a thing out here,” Shaver said. “Just like when they increased funding to higher education, and Great Basin (College) still took a hit.”
The Nevada Mining Association is one of the sponsors for the Coalition to Defeat the Margin Tax Initiative.
According to a geographically-weighted poll the coalition cited in its presentation, the majority of Nevadans voted yes for the margin tax in most instances.
“We can beat it, but it is going to be really hard to defeat,” Levine said.
The margin tax initiative, which is being labeled as an education initiative by proponents, will be listed on the ballot in November.