Heck: Sandoval's tax on big businesses could hurt small businesses

U.S. Senate hopeful Joe Heck raised concerns earlier this month that the new Commerce Tax, proposed by Gov. Brian Sandoval and passed by the Legislature, could have an impact “on small businesses and their ability to grow, add to their payroll.”

The congressman’s comments, made April 4 to a real estate group, were picked up by a Democratic tracker. Heck’s criticism of fellow Republican Sandoval’s tax plan is his strongest to date and came unprompted as he began his speech to the Institute of Real Estate Management at Lawry's Prime Rib in Las Vegas.

Heck ticked off a list of possible inhibitors to the economic recovery, mentioning the Dodd-Frank financial regulation law and Obamacare before invoking what he called “the gross margins or commerce tax…that was passed last time, and what an impact that can have on small businesses and their ability to grow, add to their payroll.”

I’m sure Sandoval will love hearing the use of the word “margins,” no matter how accurate, because of how hard he and others have tried, accurately, to say it is not the same as the margins tax crushed at the ballot in 2014. And I'm sure candidates from state Senate Majority Leader Michael Roberson to vulnerable GOP legislative incumbents can look forward to ads that begin, "Even Congressman Joe Heck says...." 

One minor point: The new tax is on enterprises that gross $4 million annually, which will have an impact on very few businesses you could reasonably characterize as “small.”

Heck later suggested to the audience that members contact their “state senator and state assembly person so we go back into the legislative session in February of 2017, they can tweak what they did, so that you know, the unintended consequences can get erased.”

Sandoval's spokeswoman, Mari St. Martin, responded to Heck's remarks. "The Governor appreciates Congressman Heck’s concerns about protecting small businesses," she said via email. "That’s why the Governor went to great effort to make sure the commerce tax would only affect businesses that generate more than $4 million annually in revenue and provided payroll relief to the larger businesses that will be subject to the enhancement. To be clear, more than 95 percent of Nevada’s businesses will not pay the commerce tax. The number of small business employers in Nevada is at its highest level in state history, and at a record high 592,000, the number of small business employees is also at an all-time high, and growing.  This means that small business in Nevada is thriving and has added back the tens of thousands of jobs lost during the recession."

Yes, I am sure the governor is greatly appreciative of Heck's remarks.

Brian Baluta, Heck’s campaign spokesman, reacted to what the congressman said at the meeting by saying, “Dr. Heck talks to small business owners across Nevada about their ability to grow and create jobs. They express concerns about the regulatory burdens of Dodd Frank and the Affordable Care Act, as well as uncertainty about the commerce tax. As a former small business owner, Dr. Heck shares those concerns.”

Heck has not said much about the tax package. When he came on “Ralston Live” last July after he announced his U.S. Senate candidacy, his criticism was more implicit: "All I can say is that in general coming out a recession business is just starting to get back on track. Perhaps you’ve got to think twice about placing an increased burden on them as we’re trying to get to grow the economy and put more people back to work.”

Heck’s opponent in the race, former Attorney General Catherine Cortez Masto, supports the tax package, her spokesman told me.