Considering how nothing's riding on this-- the future of education funding, the future of Nevada's economy and the stability of the state's tax structure, to pilfer a construct from Jason Robards as Ben Bradlee -- I'm not that surprised every margin tax document gets whipped around in the political maelstrom.
When numbers maven Jeremy Aguero released his study paid for by both sides, proponents were furiousas teachers union rep Dan Hart all but accused him of cooking numbers he had prepared for both sides that showed Nevada's business tax rate skyrocketing. (Aguero has defended the integrity of his study while Hart clearly believes he was blindsided.) And when the Guinn Center for Policy Priorities, a promising new centrist think tank released its down-the-middle position paper, Aguero disagreed with it in parts.
Now, in this Ping Pong game of numbers, the Guinn Center has updated its report with an addition to its executive summary to show how it arrived at a $460 million annual estimate of revenues raised as opposed to Aguero's $650 million to $750 million projection:
To calculate this revenue estimate, the Guinn Center for Policy Priorities drew from lessons learned in
Texas, which implemented a similar tax in 2007. At the outset, the original revenue estimate in Texas
was $5.9 billion; however, the actual revenue was $4.5 billion, which amounts to a 24 percent difference
in estimated versus realized revenues. The primary reason for this difference was that Texas
underestimated the percentage of revenue that businesses would deduct as cost of goods sold. Texas
originally estimated that businesses that deduct costs of goods sold would deduct 68 percent of revenue.
Actual experience, however, has shown that businesses deduct 83 percent of revenue as cost of goods
sold. Drawing on the Texas experience, the Guinn Center’s analysis uses the more conservative
assumption of 83 percent to obtain a revenue estimate of $460 million. Changing the cost of goods sold
deduction assumption to Texas’s original assumption of 68 percent results in a revenue estimate of $690
million. Therefore, we note that the annual revenue could range from $460 million to $690 million
depending upon the percent of revenue businesses deduct for the cost of goods sold.
Reasonable methodology, right? Sure.
But I don't think the primary issue with The Education Initiative (see if opponents call it by its real name once all year) is how much money it will raise, whether it's half a billion dollars or more or less. It's where the money is coming from, where it's going and whether it is a good proverbial third leg to the tax stool now unbalanced with mostly gaming and sales taxes.
I'd like to see that debated, rather than talking about how passing it will turn Nevada into Earth after Judgment Day or how opposing it means you hate children and love Big Business.
Considering how nothing's riding on this-- the future of education funding, the future of Nevada's economy and the stability of the state's tax structure, to pilfer a construct from Jason Robards as Ben Bradlee -- I'm not that surprised every margin tax document gets whipped around in the political maelstrom.
When numbers maven Jeremy Aguero released his study paid for by both sides, proponents were furious as teachers union rep Dan Hart all but accused him of cooking numbers he had prepared for both sides that showed Nevada's business tax rate skyrocketing. (Aguero has defended the integrity of his study while Hart clearly believes he was blindsided.) And when the Guinn Center for Policy Priorities, a promising new centrist think tank released its down-the-middle position paper, Aguero disagreed with it in parts.
Now, in this Ping Pong game of numbers, the Guinn Center has updated its report with an addition to its executive summary to show how it arrived at a $460 million annual estimate of revenues raised as opposed to Aguero's $650 million to $750 million projection:
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