Vote no on the margin tax
May 7, 2014
How would you feel if the government taxed you in a way which forced you to borrow money to pay the taxes, because you did not have enough cash flow from your take home pay? Would you think such a tax was unjust? Well, the Margin Tax Initiative (Presented as: “The Education Initiative”) does just that. In our business, we will be forced to borrow money, pledging our assets, to pay the tax, because we self-finance our sales, and actual cash flow is very limited. Stated “Income” and actual “cash flow” are vastly different. The proposed Education Initiative does not take this into consideration. There is no current federal or state tax which is so devastating to our business. Only the proposed Education Initiative is so egregious.
Would you think it unfair if you were taxed, even if you had little or no take home pay? The Margins Tax does not consider if your business is profitable or not. It taxes on Gross Income (with limited deductions for expenses) even if you are making little or no profit.
If your take home pay was $2,000 per month, would you think that a tax requiring you to pay over $1,000 per month, about half of your take home pay was unjust? Would such a tax have a negative impact on your life and ability to care for your family? Well, the Margin Tax Initiative (Presented as: “The Education Initiative”) has this type of impact on many businesses in Nevada. In the Restaurant business for example, the bottom line profit is often between 1.5% and 5% of gross sales. Is it a just tax which asks such businesses to pay almost all, or more than half of their profits in a new tax?
Would businesses in Nevada be forced to cut expenses and raise prices to their customers as a result of this proposed tax? Yes! Would some employees lose their jobs because of this new tax? Yes! Would employers reduce future pay increases to existing employees to pay the new tax? Yes! Will businesses looking to relocate to Nevada decide to move to another state because of this proposed tax? Yes!
Will every Nevada citizen who purchases goods, services, food, clothing, pay more for all such items because of this tax? Yes!
Will the proposed new money generated from the “Education Initiative” be guaranteed to get to the teachers and improvements in education? No! The Legislature may cut other funding currently going to the schools because of this proposed new source of school funds. There is no guarantee that the schools and teachers will actually realize much or any increase in their budgets.
The Education Initiative (Gross Margin Tax) is a poorly thought out very damaging tax. Please vote no on the Education Initiative.