First PR salvo fired against margin tax

By the time the battle over the margin tax is over, a lot of people are going to make a lot of money that could have been better spent on education.

Today, Faiss Foley Warren,  the public relations firm hired by opponents sent out its first news release, which is worth annotating because it surely presages themes to come.





Las Vegas, NV --- A coalition has formed as the official campaign group to oppose the Margin Tax Initiative on the November 2014 ballot in Nevada.  Initial members of the coalition include statewide organizations representing thousands of small and large employers, farmers, ranchers and other concerned (They are always "concerned," aren't they? Deeply sometimes.) Nevadans throughout the state.

The Coalition’s goal is to provide voters with information about why the Margin Tax Initiative is a deeply (See! Deeply!) flawed and costly tax increase measure. This initiative would damage Nevada's economy, result in the loss of many existing businesses and jobs, and hurt our state's ability to compete for new businesses and jobs by making Nevada's tax burden on businesses one of the highest in the country. (And cause people to keel over and die, too, maybe!)

Background on the Margin Tax Initiative:

The Margin Tax Initiative is a tax increase proposal that will appear on Nevada’s 2014 statewide General Election ballot. If passed, every business with total GROSS (all caps, for you dummies who don't get that it's not NET)  revenues exceeding $1 million annually would be subject to a new 2% tax based on their gross revenues, regardless of whether the new tax is higher than their annual profit, or if they make any profit at all. (Theme No. 1 -- Even businesses that don't make a profit will be taxed. You know, like Americans who have bad years.)

It would mean businesses that have gross revenues just $1 over $1 million would have to calculate this complex tax based on the full $1,000,001.  And unlike many other business taxes, the Margin Tax Initiative does not allow a business to deduct all of its expenses – only some that are based on complex formulas (Full employment for accountants!)  written into the initiative. The Margin Tax Initiative would affect thousands of small businesses, such as grocery stores, restaurants, dairy farmers, medical clinics and other service providers. (Can't the Dairy Commission help those dairy farmers? What does it do anyhow?)

The Margin Tax Initiative would give Nevada one of the five highest business tax burdens in the country, even exceeding the business tax burden of California.  Studies estimate the Margin Tax Initiative would dramatically increase the business tax liability for affected companies by an average of 450 percent – 4.5 times their existing rate. (Theme No. 2 -- Courtesy of Jeremy Aguero's numbers, this is the argument that this takes Nevada essentially from no tax burden on businesses to a, ahem, JOB-KILLING burden. If only the rate had stayed at .8 percent...)  This “job-killing” (Here we go!) measure would damage Nevada’s still fragile economy, hurting every business, employer and family in the state. (EVERY one!)

Proponents of the tax measure call it the “Education Initiative” because the Margin Tax Initiative seeks to earmark its proceeds for Nevada’s Distributive School Account (DSA), which is used to fund K-12 education. However, the proposed Margin Tax does not actually guarantee additional money for education. Under this initiative, the state legislature could simultaneously take money from the DSA to fund other things. If the revenues from the proposed Margin Tax do end up funding education, the initiative provides no accountability for how school districts would spend the money. (Theme Nos. 3-4: It's not guaranteed to go to education, and there's no accountability.)

We all want to improve our schools, but the Margin Tax Initiative is not the solution.  It is so costly and poorly written that it would cause our state to lose many existing businesses and jobs while making it harder to attract new ones – without ensuring better schools for our children. (This is known as the closing argument.)


So: I don't think we need any more news releases from now until November, folks. Let me sum up: It is a job-killing tax that might not even go to education, has no accountability and will destroy the economy.

Got it?

(Image from