TX taxpayers watchdog: NV margin tax "far more burdensome" than TX version

The margin tax would raise $725 million to $825 million a year and would be "far more burdensome" than the Texas version, a Lone Star state taxpayers association chief asserted this week.

Dale Craymer made the claim in a letter to his Nevada counterpart, Carole Vilardo, who already has raised numerous questions about The Education Initiative. The letter, posted below, says the Nevada tax has a much higher rate than the Texas franchise tax on which it is based and corrals businesses the Texas tax exempts.

Craymer's revenue estimates are closer to Applied Analysis principal Jeremy Aguero's -- he said between $650 million and $750 million -- than the Guinn Center, which thinks it will bring in $460 million.

Craymer's letter was attached to an email Vilardo sent to her members, with this explanation about how it came about after a luncheon featuring Gov. Brian Sandoval eviscerating the proposal:

Following the luncheon, a program on the margin tax initiative was held.  The panel, Dale Craymer, President of the Texas Taxpayers and Research Association, Christopher Nielsen, Director of the Department of Taxation and David Turner, CPA with Turner Loy & Co., LLC and NTA Chairman of the Board was moderated by Carole Vilardo.  Among the issues raised by panelists were the third and subsequent years administrative costs, the cost of compliance, even if a business did not meet the threshold as they would still have to file a return, and the fact that sole proprietors and general partnerships were included in the Nevada initiative, but not subject to the Texas tax.

After the program, Carole asked Dale if he would provide a written response regarding revenue estimates from the tax he provided during the discussion. She also asked him to review the Guinn Report on the margin tax, because their estimate of revenue to be received was substantially less.  A copy of Dale’s letter, which was received yesterday, is attached to this email.

A few points:

►The Nevada and Texas groups are conservative. It's no surprise they oppose the tax. But Vilardo is always fair in evaluating how taxes are structured, and I assume she trusts Craymer, who is an expert on the Texas tax.

►I still think how much the tax will raise is a red herring, although I hope the higher number is right if it passes. Nobody really knows how much it will raise, nor does anyone know how much the Gang of 63 will pilfer from education. The issue should be: Is this a smart third leg of the tax stool?

►Yes, the rate probably should have been lower, and yes, the tax should have been cleaner. But is the margin tax really worse for the state than leaving tax policy in the hands of those who will not engage on tax policy? Maybe. And I am still waiting for all of these putatively well-intentioned anti-margin tax folks, who say Nevada needs more money for education, to tell me what their plan is. Hello?

►I put out a story this week on Twitter about how Texas led the country in job growth and is attracting new businesses. I did that on Twitter for two reasons:

1. To show that a state with a margin tax can thrive.

2. To inflame the anti-tax crowd.

The latter certainly worked as I immediately received pushback -- different state, different rate, etc. Fine. But paint your apocalypses for someone else until you present an alternative.

By the way, anti-margin tax crowd, Craymer thinks Texas is a low-tax state.